What This Year's Top-Performing Funds Own
Stock holdings favored by 2021's top-performing active funds are dramatically different from last year's.
For a while, it seemed like there was a simple formula for chart-topping returns: Load up on the large, growth-oriented stocks that dominated the market for most of the past five years. The so-called FAANG stocks--Facebook (FB), Amazon.com (AMZN), Apple (AAPL), Netflix (NFLX), and Alphabet (GOOG)--consumed more and more of broad market benchmarks such as the Morningstar U.S. Market index. Such stocks now make up a combined 18% of the index, and accounted for about half of the benchmark’s 20.9% total return in 2020. Companies lauded for their ability to create or disrupt entire industries, such as Tesla (TSLA), posted even bigger gains.
Even the market downturn in early 2020 didn’t significantly change these overall trends. While the overall market dropped 34.5% between Feb. 19 and March 23, 2020, there was a sharp divergence in performance for different investment styles. Morningstar’s Large Growth index was down about 30.9%, compared with a 47.7% loss for the Small Value index. Technology stocks also were relatively unscathed by the market downturn, while more economically sensitive areas suffered sharp losses thanks to fears about the potential economic impact of the global coronavirus pandemic.
Amy C. Arnott has a position in the following securities mentioned above: AAPL. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.