When aggressive growth paid off, it paid off big for investors in PBHG Large Cap Growth Fund (PBHLX).
In 1999, that strategy drove the fund up 67%. It outran the S&P 500 index by 46 percentage points and its rivals by 27 points.
Then not only did the bottom fall out, but the top blew off and the sides caved in on aggressive growth strategies. The fund returned -28.5% in 2001 and encored that pratfall with -28.1% in 2002, lagging both its peers and the broad market each year.
But you keep on keeping on if you’re committed to an investment strategy you’ve seen work. Manager Mike Sutton can take some heart in where his $186 million fund is in 2003.
With a fairly focused portfolio of 60 stocks and a willingness to trade — turnover is above 150% a year — Sutton feels an aggressive growth rally coming on.
“This year, for the first time in three years, we have started to see our strategy work,” Sutton said.