This growth fund uses 'popcorn stocks' to beat the market

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The D.F. Dent Premier Growth Fund has been beating the market over the last decade, and its porfolio manager said the key is not searching for quick trades.

The D.F. Dent Premier Growth Fund, which has returned over 15% annually over the past 10 years and notched a 42.9% gain in 2019, historically beats both the S&P 500 and the Morningstar average for large cap growth funds.

One of the fund's managers said it tries not to focus on capturing quick spikes in upcoming quarters but instead looks for stocks that have the potential to grow dramatically within a wider time window. The fund takes a bottoms-up approach that's led it to some rather unique favorites like Visa, S&P Global and specialty insurer Markel.The portfolio manager who helps run a mutual fund that consistently beats the market and its peers said the key to his success is being able to wait for stocks to pop., which has returned over 15% annually over the past 10 years and notched a 42.9% gain in 2019, historically beats both the S&P 500 and the Morningstar average for large cap growth funds.

Bruce Kennedy, a portfolio manager at D.F. Dent since 2007 with prior experience at T. Rowe Price and Goldman Sachs and a co-manager of the fund, said the fund tries not to focus on capturing quick spikes in upcoming quarters but instead looks for stocks that have the potential to grow dramatically within a wider time window."I had a former boss who shared with me the term of a popcorn stock.

"So we look for stocks that are like that, where you're not sure if the stock will work in the next three months or six months or maybe it will be three or four years, except you see enough ingredients in place that could make it a winning stock that the risk reward is favorable," he said.

 

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