The Needham Aggressive Growth Fund is outperforming the S&P, and there's one notable difference in its holdings: Apple is its only Big Tech stock.
Many growth funds have performed on pace with the S & P 500 this year, driven by mega-cap names such as Nvidia , Alphabet and Tesla . The Needham Aggressive Growth Fund , however, has outperformed. And there's one notable difference in its holdings: it has not relied on just a few Big Tech stocks to drive its returns. According to Morningstar data, the fund is beating the Wall Street index year-to-date, up around 28% as of Aug. 29, compared to the S & P 500's 18% rise.
"These types of managers tend to think long-term," he said. Barr also looks for the following valuation characteristic: Companies at a price with a "margin of safety," which may come from the cash flow of their legacy businesses, balance sheets, relationships with important customers, or elsewhere. "When I am right, a margin of safety purchase price may help reduce the fund's downside participation," he said.