5.5 in Large Growth
U.S. News evaluated 469 Large Growth Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.
| Scorecard | |
|---|---|
| Morningstar | 4 / 5 Stars |
| Lipper | 4 4 2 5 5 |
| Zacks Investment Research | 5 (Strong Sell) |
| Standard & Poor's | 3 / 5 Stars |
| TheStreet.com | D (Sell) |
Fund Overview
Here’s a fund for all you aggressive types. The FMI Provident Trust Strategy has a simple plan: invest in just a few large growth stocks, primarily of U.S. companies, and balance that risk out with a smattering of bonds. The fund is a non-diversified equity fund, meaning that it holds a specific asset class (large-cap growth stocks), and seeks to beat domestic stock market index returns.
As of April 04, 2012, the fund has assets totaling almost $153.38 million invested in 23 different holdings. Its portfolio, as of September 30, consists of just 16 U.S. stocks, 6 bonds, and 1 foreign stock.
But that one foreign stock is tricky since it, a position in India’s Infosys Technologies, accounts for 8 percent of its portfolio . And that’s not the fund’s top holding, either. More than 9 percent of the portfolio is invested in Cognizant Technology Solutions, a position that has served the fund well with a 48 percent return year-to-date as of October 29. And with greater than 60 percent of its assets in its top 10 holdings, investors are sure to be in for a wild ride. The fund’s turnover rate is close to the average. It holds the average stock for about two years. The fund has returned 2.76 percent over the past year and 15.85 percent over the past three years.
The fund hasn’t always achieved its goals of beating the major indices, topping the returns of the S&P 500 just half the time during the last decade. But in those same years it bested its category average seven times. The fund has returned 3.99 percent over the past five years and 7.12 percent over the past decade.
| Trailing Returns | Updated 03.31.2012 |
|---|---|
| Year to date | 11.7% |
| 1 Year | 2.8% |
| 3 Years (Annualized) | 15.9% |
| 5 Years (Annualized) | 4.0% |
| 10 Years (Annualized) | 7.1% |
Investment Strategy
The fund seeks to beat both the S&P 500 and the Russell Midcap indices over investment cycles of five to seven years. To achieve this goal, it invests in a limited number of mostly U.S. large-cap companies, which management chooses for their high-growth potential. It’s prospectus says, “Stock criteria selection includes improving revenue and earnings growth, increasing margins, significant management stock ownership and improving price-to-earnings ratios.”
Role in Portfolio
Management
Provident Trust Company has been the fund’s subadvisor since its inception in 1986. Micahel Schelble, vice president of Provident Trust Company, is the fund’s assistant portfolio manager. Alongside J. Scott Harkness, the two have managed the fund since 2002.
Performance
The fund has returned 2.76 percent over the past year, 15.85 percent over the past three years, 3.99 percent over the past five years, and 7.12 percent over the past decade.
Hypothetical Growth of $10,000
Updated 03.31.2012
Holdings
The fund provides highly-concentrated exposure to large-cap growth companies. Management has a penchant for software makers at the moment. They make up more than 27 percent of the fund’s portfolio, four times its peer average. It also has nearly 23 percent of its assets in financial services, more than twice the average for the large-cap growth category, mainly due to large bets on PNC Financial Services and Visa. While the fund’s bonds make up 11 percent of the portfolio, they are in very safe, low-yield bonds such as U.S. treasuries and JPMorgan Chase.
Asset Allocation
| % Long | % Net | |
|---|---|---|
| Cash | 5.82 | 5.82 |
| Stocks | 74.78 | 74.78 |
| Bonds | 10.12 | 10.12 |
| Other | 0.0 | 0.0 |
| Foreign Bonds | 3.83 | 3.83 |
| Foreign Stocks | 5.44 | 5.44 |
| Convertible | 0.0 | 0.0 |
| Preferred | 0.0 | 0.0 |
Updated 12.31.2011
Top Holdings
Performance as of 03.31.2012
Portfolio as of 12.31.2011
| Ticker | YTD Return % | % Net Assets | |
|---|---|---|---|
| Cognizant Technology Solutions Corporation A | CTSH | 19.75 | 7.38 |
| Accenture PLC | ACN | 23.03 | 6.82 |
| Visa, Inc. | V | 17.4 | 6.71 |
| TJX Companies | TJX | 24.12 | 6.44 |
| Google, Inc. | GOOG | 0.16 | 5.64 |
Fees
FMI Provident Trust Strategy Fund has an expense ratio of 0.98 percent.
Risk
The small number of holdings and narrow investment parameters in its portfolio make this fund much riskier than more diversified funds. But Morningstar gives the fund a “low” risk rating, partially because it has a lower standard deviation than the S&P 500.
