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 holdings||37.66%|
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 Name||1Yr AR||1Yr Sharpe||3Yr AR||3Yr Sharpe||5Yr AR||5Yr Sharpe|
|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%|
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.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.