The Number One Mid-Cap Fund Manager Over Past 3 Years Shares Strategy
Adam Green is an equity portfolio manager at Legg Mason's ClearBridge unit and shared a few tips that have made his fund the top-ranked mid-cap fund over the past three years, according to Business Insider.
Green's strategy typically involves finding small-cap stocks that are about to blow up. This basic strategy has made his fund one of the most successful mutual funds over the past 5 years.
The fund has been the top-performing mid-cap fund over the past three years and has brought annualized returns of 24.4 percent. Green does not only invest in mid-cap stocks.
"Where a lot of our exposure and performance has been driven is finding these companies that are maybe $1 billion to $5 billion in market cap, and catching them and finding them early, before they're on the radar screen of larger investors," he said.
Investors that typically stick to large-cap securities don't pay much attention to companies outside of that range. Once large-cap funds notice the companies he found when they were smaller, returns start pouring in.
"These companies quickly go from $5-$6 billion companies to $35 billion," he said, because of "the compounding of revenue growth, increasing profitability, cash generation and people realizing that these companies are going after really big market opportunities."
Adam Green's mid-cap stock fund has been ranked at the top for the past three years, and he gave a brief introduction to his strategy.