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3 / 5 Stars
U.S. News evaluated 464 Large Growth Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.
The fund has returned 21.36 percent over the past year, 10.92 percent over the past three years, 13.49 percent over the past five years, and 8.58 percent over the past decade.
|Trailing Returns||Updated 06.30.2014|
|Year to date||3.0%|
|3 Years (Annualized)||10.9%|
|5 Years (Annualized)||13.5%|
|10 Years (Annualized)||8.6%|
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 July 03, 2014, the fund has assets totaling almost $172.95 million invested in 16 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 21.36 percent over the past year and 10.92 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 13.49 percent over the past five years and 8.58 percent over the past decade.
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
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.
Provident Trust Strategy Fund has an expense ratio of 1.00 percent.
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.