Russel Kinnel: The trick with choosing a growth fund is to separate those who go deep with their research from those who are merely spouting buzzwords about technology and trends. The second part, which is a lot easier, is to make sure you are paying a modest fee no matter how smart that manager sounds.
3 Great Growth Funds for 2023
- Vanguard International Growth VWILX
- Harbor Capital Appreciation HACAX
- T. Rowe Price Blue Chip Growth TRBCX
I picked three growth funds by screening for actively managed medalist funds that underperformed their peers in 2022. I limited it to retail shares with low fees. Clocking in at an expense ratio of just 34 basis points, Silver-rated Vanguard International Growth is one of the best bargains in growth investing. The rather aggressive Baillie Gifford runs 70% of the portfolio, and Schroders, which likes core and growth stocks, runs the other 30%. That aggressive side of the fund hurt in 2022, but Baillie Gifford has shown it can find winners that work over the long haul.
Harbor Capital Appreciation is a U.S.-focused growth fund with a knack for picking good tech stocks. Subadvised by Jennison Associates, the fund has a solid long-term record and charges just 66 basis points. Its fondness for tech stocks led to a 38% loss in 2022, but when tech is in favor it can be very rewarding. The fund boasts seasoned managers and a deep bench of analysts. We rate it Gold.
Finally, T. Rowe Price Blue Chip Growth is run by manager Paul Greene, who took over in 2021. The fund promptly lost 39% in 2022. So, why do I have faith in a relatively new manager with a small and unimpressive track record? First, he built a strong record at T. Rowe Price Communications and Technology PRMTX. Second, he served as an associate manager at this fund for two years before taking the helm. Finally, T. Rowe Price has an excellent tech and healthcare bench for Greene to lean on. The fund’s 69-basis-point expense ratio makes it a bargain, too.
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