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In a recently published article Is Delaware Funds' Ericksen the Next Star Manager?, AdvisorOne referred to Delaware Select Growth (VAGGX) fund manager Christopher Ericksen. A closer look at the mid-cap growth fund, also managed by Jeff van Hart, shows it has posted a very strong performance in recent years (an impressive 9% annual return in the past five years), although it lost a whopping -44% in 2008.

Based on Delaware's website, the fund's Top 10 holdings as of 02/29/2012 include:

Holding% of portfolio
APPLE INC (AAPL)10.55%
MASTERCARD INC (MA)4.68%
K12 INC (LRN)3.24%
DINE EQUITY INC (DIN)3.14%
CROWN CASTLE INTERNATIONAL (CCI)2.99%
APOLLO GROUP INC (APOL)2.92%
WEIGHT WATCHERS (WTW)2.89%
PRICELINE.COM INC (PCLN)2.61%
ALLERGAN INC/UNITED STATES (AGN)2.32%
GOOGLE INC (GOOG)2.32%
Total % Portfolio in Top 10 holdings37.66%

The fund's average PE ratio is 16, lower than the mid-cap growth average of 18 PE. But the companies it holds have average earning growth (last three years) of 17%, way above the 11% of the mid-cap growth stocks' average. Apparently, the managers are able to find high growth stocks at reasonable prices.

The following compares the fund's performance with two diversified ETF portfolios:

Portfolio Performance Comparison (as of 3/29/2012)

Portfolio/Fund Name1Yr AR1Yr Sharpe3Yr AR3Yr Sharpe5Yr AR5Yr Sharpe
VAGGX22%93%40%184%9%30%
Retirement Income ETFs Strategic Asset Allocation Risk Profile 0-1%7%26%103%2%3%
Retirement Income ETFs Tactical Asset Allocation Risk Profile 0-2%-1%13%68%10%47%

Portfolio Compare Link

Three-Year Chart

Click to enlarge

For investors looking for high growth stocks at acceptable prices, the above top 10 holdings can be good starting candidates.

Disclaimer: We do not have any business relationship with the company or companies mentioned in this article. We do not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.

Source: 10 Growth Stocks From The Next 'Star' Manager?