A standout year of strong returns for US equities would have been a surprise to many market participants at the start of 2023, since a recession was widely anticipated by economists at the time.
This is because when the US Federal Reserve continued to raise interest rates to combat inflation over the course of 2023, it not only reduced stock valuations, but also increased the likelihood of an economic slowdown.
So, when the S&P 500 index finished the year with a 26.29% return, many active fund managers might have been caught off guard.
Out of 282 funds available for distribution in Singapore with at least a one-year track record, less than half managed to beat the S&P 500 index.
Even fewer strategies (16) managed to beat the Russell 1000 Growth index return of 42.68% – another widely used benchmark favored by growth fund managers. None outperformed the NASDAQ 100 index return of 55.13%.
However, 10 actively managed strategies stood out last year with returns more than 20 percentage points above the S&P 500 index. Below are the 10 strategies, according to data compiled from FE fundinfo.
| Fund | 2023 performance (%) | 3yr performance (%) | 5yr performance (%) |
| PGIM Jennison US Growth | 53.47 | 4.17 | 114.9 |
| BlackRock GF US Growth | 52.68 | 6.37 | 92.91 |
| MS INVF US Insight | 52.26 | -47.18 | 34.65 |
| Sands Capital US Select Growth Fund | 51.3 | -20.88 | 76.97 |
| Natixis Loomis Sayles US Growth Equity | 49.56 | 26.07 | 111.67 |
| T. Rowe Price US Blue Chip Equity | 49.54 | 5.81 | 81.57 |
| MS INVF US Growth | 49.29 | -40.36 | 62.08 |
| New Capital US Growth | 48.68 | 17.87 | N/A |
| T. Rowe Price US Large Cap Growth Equity Fund | 48.64 | 12.71 | 98.92 |
| Baillie Gifford Worldwide US Equity Growth | 46.58 | -40.55 | N/A |
Most of the best performing were those that suffered heavily during the difficult year of 2022 where most asset classes slumped as the Fed embarked on its interest rate hiking cycle.
The highest performing fund in the list was the $116m PGIM Jennison US Growth fund, managed by Blair Boyer, Natasha Kuhlkin and Kathleen McCarragher.
The strategy was up 53.47% in 2023, after a 39.83% loss in 2022. Over a five-year period ending 2023, the strategy was up 114.9% versus a 107.21% return from the S&P 500 index.
The fund benefitted from its underweight position in Apple, which lagged the performance of the other big tech companies last year, and an overweight position in Eli Lilly, which performed exceptionally well on the back of its popular selling obesity drug.
The second highest performing fund in the list was the $395m BlackRock US Growth fund, managed by Phil Ruvinsky and Caroline Bottinelli.
The strategy was up 52.68% last year, after a 40.57% loss in 2022. Over a five-year period ending 2023, the strategy was up 92.91% – lagging the S&P 500 index return of 107.21%.
However last year the fund benefitted from its overweight positions in semiconductor firms Nvidia, Broadcom and Cadence Design Systems – all of which were up significantly in 2023.
Another notable fund in the list is the $3.1bn Natixis Loomis Sayles US Growth Equity fund, managed by Aziz Hamzaogullari.
The strategy was up 49.56% last year, following a 28.2% loss in 2022 – a relatively lower loss compared with funds in the list above. Over a five-year period ending 2023, the strategy was up 111.67%.
The fund has benefitted from its overweight positions in Nvidia, Tesla, Alphabet and Meta which all performed well in 2023.
