10 funds that beat the S&P 500 by over 20% in 2023 - Fund Selector Asia (2024)
A standout year of strong returns for US equities would have been a surprise to many market participants at the start of 2023, since a recession was widely anticipated by economists at the time.
This is because when the US Federal Reserve continued to raise interest rates to combat inflation over the course of 2023, it not only reduced stock valuations, but also increased the likelihood of an economic slowdown.
So, when the S&P 500 index finished the year with a 26.29% return, many active fund managers might have been caught off guard.
Out of 282 funds available for distribution in Singapore with at least a one-year track record, less than half managed to beat the S&P 500 index.
Even fewer strategies (16) managed to beat the Russell 1000 Growth index return of 42.68% – another widely used benchmark favored by growth fund managers. None outperformed the NASDAQ 100 index return of 55.13%.
However, 10 actively managed strategies stood out last year with returns more than 20 percentage points above the S&P 500 index. Below are the 10 strategies, according to data compiled from FE fundinfo.
Fund
2023 performance (%)
3yr performance (%)
5yr performance (%)
PGIM Jennison US Growth
53.47
4.17
114.9
BlackRock GF US Growth
52.68
6.37
92.91
MS INVF US Insight
52.26
-47.18
34.65
Sands Capital US Select Growth Fund
51.3
-20.88
76.97
Natixis Loomis Sayles US Growth Equity
49.56
26.07
111.67
T. Rowe Price US Blue Chip Equity
49.54
5.81
81.57
MS INVF US Growth
49.29
-40.36
62.08
New Capital US Growth
48.68
17.87
N/A
T. Rowe Price US Large Cap Growth Equity Fund
48.64
12.71
98.92
Baillie Gifford Worldwide US Equity Growth
46.58
-40.55
N/A
Most of the best performing were those that suffered heavily during the difficult year of 2022 where most asset classes slumped as the Fed embarked on its interest rate hiking cycle.
The highest performing fund in the list was the $116m PGIM Jennison US Growth fund, managed by Blair Boyer, Natasha Kuhlkin and Kathleen McCarragher.
The strategy was up 53.47% in 2023, after a 39.83% loss in 2022. Over a five-year period ending 2023, the strategy was up 114.9% versus a 107.21% return from the S&P 500 index.
The fund benefitted from its underweight position in Apple, which lagged the performance of the other big tech companies last year, and an overweight position in Eli Lilly, which performed exceptionally well on the back of its popular selling obesity drug.
The second highest performing fund in the list was the $395m BlackRock US Growth fund, managed by Phil Ruvinsky and Caroline Bottinelli.
The strategy was up 52.68% last year, after a 40.57% loss in 2022. Over a five-year period ending 2023, the strategy was up 92.91% – lagging the S&P 500 index return of 107.21%.
However last year the fund benefitted from its overweight positions in semiconductor firms Nvidia, Broadcom and Cadence Design Systems – all of which were up significantly in 2023.
Another notable fund in the list is the $3.1bn Natixis Loomis Sayles US Growth Equity fund, managed by Aziz Hamzaogullari.
The strategy was up 49.56% last year, following a 28.2% loss in 2022 – a relatively lower loss compared with funds in the list above. Over a five-year period ending 2023, the strategy was up 111.67%.
The fund has benefitted from its overweight positions in Nvidia, Tesla, Alphabet and Meta which all performed well in 2023.
That makes outperforming the S&P 500 on a consistent basis no small task. The one fund that has beaten the index in nine of the past 10 years is the Technology Select Sector SPDR Fund (NYSEMKT: XLK).
That makes outperforming the S&P 500 on a consistent basis no small task. The one fund that has beaten the index in nine of the past 10 years is the Technology Select Sector SPDR Fund (NYSEMKT: XLK).
Key Points. The S&P 500's track record is impressive, but the Vanguard Growth ETF has outperformed it. The Vanguard Growth ETF leans heavily toward tech businesses that exhibit faster revenue and earnings gains. No matter what investments you choose, it's always smart to keep a long-term mindset.
On average, the Fidelity Contrafund has beaten the S&P 500 Index by 2.57% per year. Growth of $10,000 invested in Contrafund versus S&P 500 Index, September 17, 1990 to December 31, 2023. Total value December 31, 2023 for Contrafund was $637,227, compared to $296,182 for the S&P 500 Index.
His investment strategy of buying wonderful businesses at a fair price has helped produce a compound annual return of 19.8% since he took over Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) in 1965. That absolutely trounces the S&P 500's average total return of 10.2% during that period.
From 2005 to 2020, for instance, the Vanguard Small-Cap ETF beat the S&P 500 by several percentage points. Since then, however, it has lagged the market by a whopping 38%. This gap between small caps and large caps is the widest it has been since the dot-com bubble.
Invesco QQQ — the ETF that tracks the Nasdaq-100 index — has beaten the S&P 500 nine out of the last 10 years. Source: Morningstar Inc. Data begins 10 years prior to the ending date. Fund performance shown at NAV.
It's not easy to beat the S&P 500. In fact, most hedge funds and mutual funds underperform the S&P 500 over an extended period of time. That's because the S&P 500 selects from a large pool of stocks and continuously refreshes its holdings, dumping underperformers and replacing them with up-and-coming growth stocks.
Top performing investment funds owned by Vanguard worldwide 2024, by one-year return. As of May 2024, the Vanguard Communication Services Index Fund provided the highest one-year return rate. The Vanguard Mega Cap Growth Index ranked second having a one-year return rate of 37.4 percent.
There is no secret to beating the S&P 500: Small caps have a long history of doing so. If you want to beat the market over the decade ahead, your best option looks to be a small-cap ETF like Vanguard's, which offers instant exposure, low fees, and a historically low valuation.
Buffett has said that he believes the average U.S. investor should regularly put their money into an S&P 500 index fund, and he's bet that the S&P 500 will outperform the average actively managed fund in the long run.
The Vanguard S&P 500 Growth Index Fund ETF (NYSEMKT: VOOG) has trounced the S&P 500 this year with a gain of nearly 15.7%. As its name indicates, this ETF focuses on growth stocks in the S&P 500. There are many of them, as this ETF owns 229 stocks. Its top holdings include Microsoft, Apple, and Nvidia.
Overall, you might save money at Fidelity if you trade options, but Vanguard will be cheaper if mutual funds are your focus. The key difference is that Fidelity is low-cost for a wide range of investor types, while Vanguard is a great low-cost solution aimed primarily at buy-and-hold investors.
DexCom, Inc.(NASDAQ:DXCM) and Medpace Holdings, Inc.(NASDAQ:MEDP) are the only two healthcare sector companies that have made it onto our list of 13 stocks that outperform the S&P 500 every year for the last 5 years. The shares of DexCom, Inc.
The Vanguard Russell 2000 ETF (NASDAQ: VTWO) tracks the small-cap Russell 2000 index, which outperformed the S&P 500 for the 35 years from its inception in 1979 to 2014. Since 2014, however, large caps have dominated the market, outperforming small caps.
Other mutual fund schemes which managed to beat the benchmark index were ICICI Prudential Focused Equity Fund, HDFC Focused 30 Fund and Franklin India Focused Equity Fund.
Introduction: My name is Dan Stracke, I am a homely, gleaming, glamorous, inquisitive, homely, gorgeous, light person who loves writing and wants to share my knowledge and understanding with you.
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