Alec Lucas: Bronze-rated Alger Spectra (SPECX) takes an aggressive but very effective approach to growth investing.
Benchmarked against the Russell 3000 Growth Index, it's more of an all-cap vehicle, though it lands in Morningstar's large-growth category. Besides investing across the market-cap spectrum, the fund can also short up to 10% of its assets.
Manager Patrick Kelly uses this flexibility to great effect. Like Alger's other managers, he focuses on emerging firms with high unit volume growth as well as established firms undergoing positive life-cycle changes, such as product innovations--think Apple, recently.
Where Kelly differentiates himself, though, is in his ability to stay ahead of the competition. Since taking over in September 2004, the fund has the best record in the entire large-growth category. And it's been consistent, too. The fund’s five-year rolling returns from Kelly's start date through January 2015 place in the category's top quartile 100% of the time.
Prospective investors have to be able to stomach above-average volatility and to tolerate a lofty fee hurdle. Those who fit that profile should give this fund a serious look.