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Market Update

In volatile 2000, Excelsior Large Cap Growth Looks Misleadingly Average

A concentrated portfolio has damaged performance, but this is still a good option.

Excelsior Large Cap Growth’s (UMLGX) 8% loss for the year to date through December 12, 2000, is grim. Investors shouldn’t fret too much, though, because the fund’s troubles aren’t unusual.

Still, the fund’s willingness to make sizable sector bets has stung. With just 26 holdings—far less than the category average—positions of more than 5% aren’t uncommon. Thus, the fund has been hurt by large tech positions, such as Solectron .

Luckily, the fund’s sector bets haven’t been limited to technology. A larger-than-average stake in financial firms, such as American International Group (AIG) and Citigroup (C) has boosted returns. Moreover, although the managers trade infrequently—indeed the fund’s turnover ratio is miniscule relative to its peers—the moves they’ve made lately have worked well. They added to positions in Brocade Communications Systems  and BEA Systems , both of which have performed well throughout the year.

For more on this fund, click here to read the latest Morningstar Take.

Gabriel Presler does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.