This year Lipper Fund Awards winners were announced on Wednesday in New York. The awards are given out each year by Refinitiv and recognize leading funds and fund management firms in more than 20 countries.
The winners revealed their favored sectors and companies, which in their view can weather the current challenges, as global markets experienced their worst fall since the 2008 financial crisis, due to the Covid-19 epidemic.
Stocks That Can Survive and Thrive
Wells Fargo & Co. (NYSE: WFC), Needham & Company, Madison Investors and GMOs are “looking at” companies in the healthcare, technology, and financial service sectors.
Chris Retzler, portfolio manager of Needham Small Cap Growth Fund, said, “We felt that we were due for a correction, we just didn’t know what would trigger it, and when it would begin.” He remains a bull and is focussing on 5G, data security and military modernization. He is also positive on healthcare-related companies.
Wells Fargo Endeavor Select Fund’s Mike Smith has added DexCom Inc. (NASDAQ: DXCM), a medical device company, to his portfolio. He revealed, “We’re trying to find those companies that are impervious to what’s going on right now.”
The Definition of Quality Stocks Has Changed
Award winners exuded confidence about the future. Tom Hancock, portfolio manager at GMO Quality Fund, said that market risks from the coronavirus outbreak should “burn themselves out” in the next two quarters. He added Lyft Inc. (NASDAQ: LYFT) to his portfolio as he found valuations attractive after the company’s “broken” initial public offering.
Hancock is focussed on the shares of companies that can keep growing despite the impact of Covid-19. His focus is on big technology firms like Apple Inc. (NASDAQ: AAPL) and Alphabet Inc. (NASDAQ: GOOGL) (NASDAQ: GOOG) owned Google. He calls these tech giants, “natural monopolies.”
“If you say high quality stocks, people think of names like Procter and Gamble Co. (NYSE: PG) and Pfizer Inc. (NYSE: PFE),” opined Hancock, “We think the new quality stocks are the technology stocks that have very low capital requirements and operate winner-take-all business models.”
Hancock, though bullish has a word of caution, “We still have concerns that are stopping us from going out and buying absolutely everything.”
Photo Credit: Public domain photo via Wikimedia.