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Alex Umansky is the man behind the best-performing equity mutual fund this year. Baron Fifth Avenue Growth (BFTIX) , with nearly $500 million in assets under management, has rallied more than 58% this year, taking the No.1 spot for a winning stock fund in 2023, according to Morningstar. It outpaced the broader market in a banner year for stocks with the S & P 500 gaining more than 24% and the Nasdaq Composite rallying 44%. Umansky, who’s been in the industry for 30 years, is the sole portfolio manager for the fund. The New York University grad joined Baron in 2011 and he also manages a few other strategies for the firm. One of the most unique features of this growth-oriented fund is its high conviction as it only owned 30 stocks at the end of the third quarter. Its peers tend to hold about 107 stocks on average, according to Morningstar. The fund’s top 10 holdings represented 62% of its net assets. Umansky’s fund seeks to find long-term, durable growth opportunities in the large cap space. It focuses on disruptive tech companies, artificial intelligence, cloud computing, big data, autonomous driving, virtual reality and blockchain. Its biggest holding Nvidia , with a 10.4% weighting, has rallied a whopping 239% this year, playing a big role in the fund’s stellar performance. Umansky first bought the chip giant in the first quarter of 2021, according to Morningstar. The fund’s other top bets, Amazon , ServiceNow , Shopify , Meta Platforms , Snowflake and Tesla, have all been market leaders this year amid the enthusiasm towards AI. The manager also has a long-term approach to growth investing where he views a stock as a piece of the business. “We do not rent stocks – we own businesses,” 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.” The manager said he doesn’t typically rotate sectors, go to cash or buy mediocre names during times of volatility. The fund has a low 22% turnover rate over the past three years. BFTIX charges an expense ratio of 1%.
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