Alex Umansky: The Man Behind the Best-Performing Equity Mutual Fund of 2023
Alex Umansky is the portfolio manager of Baron Fifth Avenue Growth (BFTIX), the best-performing equity mutual fund this year. With assets under management of nearly $500 million, the fund has achieved a remarkable rally of over 58% in 2023, making it the top-performing stock fund according to Morningstar. This performance surpasses the broader market’s gains, with the S&P 500 increasing by more than 24% and the Nasdaq Composite rallying 44%.
Umansky, who has three decades of industry experience, joined Baron in 2011 and is solely responsible for managing BFTIX. The fund stands out for its high conviction approach, holding only 30 stocks at the end of Q3. In comparison, its peers typically hold around 107 stocks on average.
Focusing on Disruptive Tech Companies and Growth Opportunities
BFTIX concentrates on finding long-term growth opportunities in the large-cap space, particularly in disruptive tech companies. The fund emphasizes investments in areas such as artificial intelligence, cloud computing, big data, autonomous driving, virtual reality, and blockchain.
Its largest holding is Nvidia, which accounts for 10.4% of the fund’s portfolio and has surged by an impressive 239% this year. Umansky first purchased shares of Nvidia in Q1 2021. Other top bets include Amazon, ServiceNow, Shopify, Meta Platforms, Snowflake, and Tesla – all of which have been leaders in their respective markets due to the growing enthusiasm for AI.
A Long-Term Ownership Mindset
Umansky adopts a long-term approach to growth investing by viewing stocks as pieces of businesses. He emphasizes that the fund does not engage in short-term trading but rather focuses on long-term ownership. Umansky wrote in a recent investor letter, “A long-term ownership mindset is foundational to our investment philosophy and process, and we are willing to live with the volatility of valuation multiples and stock prices over full-market cycles.”
Additionally, Umansky remains committed to his investment strategy during times of market volatility. He avoids rotating sectors, going to cash, or investing in mediocre names. The fund has maintained a low 22% turnover rate over the past three years.
Conclusion: Baron Fifth Avenue Growth’s Impressive Performance
Alex Umansky’s management of Baron Fifth Avenue Growth has propelled the fund to become the best-performing equity mutual fund of 2023. With its high conviction approach, focus on disruptive tech companies, and long-term ownership mindset, BFTIX has delivered exceptional returns. Its top holdings, including Nvidia, Amazon, and Tesla, have contributed significantly to its stellar performance. Investors who seek exposure to growth opportunities in the large-cap space may find value in considering Baron Fifth Avenue Growth as part of their investment strategy.
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