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The exceptionally strong returns for U.S. stocks in early 2023 likely came as a surprise to many market participants, as a recession was widely expected among economists at the time.
That’s because when the Federal Reserve continued to raise interest rates throughout 2023 to fight inflation, it not only depressed stock valuations but also increased the likelihood of an economic slowdown.
So many active fund managers may have been caught off guard when the S&P 500 ended the year with a return of 26.29%.
Of the 282 funds available for distribution in Singapore with at least a one-year track record, less than half were able to outperform the S&P 500 index.
Even fewer strategies (16) beat the 42.68% return of the Russell 1000 Growth Index, another widely used benchmark favored by growth fund managers. No stock outperformed the Nasdaq 100 index’s return of 55.13%.
But last year, 10 actively managed strategies outperformed the S&P 500 index by more than 20 percentage points. According to data compiled by FE Fundinfo, these are the 10 strategies:
| fund | Performance in 2023 (%) | 3 year performance (%) | 5 year 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 Stocks | 49.56 | July 26th | 111.67 |
| T. Rowe Price U.S. Blue Chip Stocks | 49.54 | 5.81 | 81.57 |
| MS INVF US Growth | 49.29 | -40.36 | 62.08 |
| The growth of America’s new capital | 48.68 | 17.87 | Not applicable |
| T. Rowe Price U.S. Large Cap Growth Fund | 48.64 | 12.71 | 98.92 |
| Baillie Gifford’s Global US Stock Growth | 46.58 | -40.55 | Not applicable |
Most of the best-performing stocks were those that were hit hard during the difficult year of 2022, when most asset classes fell as the Fed embarked on a rate hike cycle.
The top-performing fund on the list was the $116 million PGIM Jennison US Growth Fund, managed by Blair Boyer, Natasha Kurkin, and Kathleen McCarragher.
This strategy lost 39.83% in 2022 and gained 53.47% in 2023. Over the five-year period ending in 2023, this strategy gained his 114.9%, while the S&P 500 index returned his 107.21%.
The fund benefited from an underweight position in Apple, which lagged other big tech companies last year, and an overweight position in Eli Lilly, which performed exceptionally well thanks to its popular obesity drug. .
The second best performing fund on the list was the $395 million BlackRock US Growth fund managed by Phil Lubinsky and Caroline Bottinelli.
This strategy lost 40.57% in 2022 and gained 52.68% in the last year. Over the five-year period ending in 2023, this strategy gained 92.91%, lagging the S&P 500 Index’s return of 107.21%.
But last year, the fund benefited from overweight positions in semiconductor companies Nvidia, Broadcom and Cadence Design Systems, all of which rose significantly in 2023.
Another notable fund on the list is the $3.1 billion Natixis Loomis Sayles US Growth Equity Fund, managed by Aziz Hamzaoglari.
The strategy lost 28.2% in 2022 before gaining 49.56% last year. This is a relatively low loss compared to the funds listed above. In the 5 years to 2023, this strategy increased him 111.67%.
The fund benefits from overweight positions in Nvidia, Tesla, Alphabet, and Meta, all of which performed well in 2023.
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