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U.S. News evaluated 222 Mid-Cap Growth Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.
Note: Profile written for different share class.
The fund has returned 24.65 percent over the past year, 17.39 percent over the past three years, 24.58 percent over the past five years, and 11.77 percent over the past decade.
|Trailing Returns||Updated 01.31.2014|
|Year to date||-3.9%|
|3 Years (Annualized)||17.4%|
|5 Years (Annualized)||24.6%|
|10 Years (Annualized)||11.8%|
FBR Focus's management team takes seriously its mandate to run a concentrated portfolio.
As of February 05, 2014, the fund has assets totaling almost $1.40 billion invested in 27 different holdings. Its portfolio consists primarily of shares of small and mid-sized companies.
For this fund, 2010 was a middling year. It returned 24 percent, which was quite solid on an absolute basis, but on a relative basis, it wasn't good enough to land it in the top half of Morningstar's mid-cap growth category. Notably, American Tower Corporation, a provider of wireless and broadcast towers that represents a whopping 12 percent of this fund's portfolio, had a strong showing last year, but not strong enough to lead this fund to the front of the pack. Overall, huge positions are the norm for this fund, which closed out 2010 with just 17 names in its portfolio. Apart from American Tower, O'Reilly Automotive and CarMax are also huge holdings. Together, just 10 companies accounted, as of the end of 2010, for 86 percent of the fund's portfolio. Since 2009, the fund's concentrated nature has held it back, although over the longer term, the strategy has worked quite well. Lately, management has been betting on the health of the U.S. consumer, with consumer services companies making up upwards of 40 percent of its stock holdings. This reflects management's hope that Americans will start spending more as the economy rebounds. One of the bigger changes to affect this fund in recent years happened in 2009, when long-time and well-known manager Chuck Akre left the fund. The current team of managers worked under Akre before he departed to start the Akre Focus fund. The fund has returned 24.65 percent over the past year and 17.39 percent over the past three years.
Over time, this fund has come to be defined by a concentrated, low-turnover strategy. This speaks to two attributes: management's strong conviction in its picks and a pronounced buy-and-hold strategy. Another distinctive feature is this fund's reliance on small-cap stocks, which represent more than 30 percent of its portfolio. Since 2000, the fund has finished in the top 2 percent of its Morningstar category in four separate years. As of the end of 2010, its trailing 10-year returns beat those of the S&P 500 by a whopping 13 percentage points per year. The fund has returned 24.58 percent over the past five years and 11.77 percent over the past decade.
According to the fund's prospectus: "[Management] implements the Fund's strategy by focusing on companies ... managed by individuals who have a history of treating public shareholders like partners and have ample opportunity to reinvest excess profits at above average rates. Once a potential investment is identified, [management] attempts to purchase shares at a price it believes represents a discount to a conservative estimate of the company's intrinsic value."
Role in Portfolio
Morningstar calls the fund a "supporting player."
A team of three managers runs the fund.
Hennessy Focus Fund has an expense ratio of 1.13 percent.
Like all stock funds, this one comes with some risks.