The past year was full of highs and lows in the stock market overall. But for midsize company stocks, 2020 was less extreme. “I would put it smack in the middle,” says Parnassus Mid Cap (PARMX) comanager Matt Gershuny. Over the past 12 months, the fund, a member of the Kiplinger 25, the list of our favorite no-load funds, gained 9.5%. That beat 76% of its peers, but lagged the 10.0% gain in the fund’s benchmark, the Russell Midcap index.
Gershuny and comanager Lori Keith took over at Mid Cap in late 2008, during the financial crisis. The duo have beaten the benchmark since then by investing in growing, well-run midsize firms that pass strenuous environmental, social and governance measures. Mid Cap’s 11.6% annualized return since the pair took over edges the 11.5% average annual gain in the Russell Midcap index. “We keep up in strong markets and do better when markets go down,” says Gershuny.
Recently, the fund has gained from strong performances in a handful of industrial stocks, including shipping company FedEx (FDX) (up 73% over the past 12 months) and global logistics company Expeditors International (EXPD) (up 16%), which helps get goods to market or to customers. “Shipping capabilities are down on commercial flights, and FedEx and Expeditors have picked up the slack,” says Gershuny.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Tech holdings have shone, too. Shares in Nuance Communications (NUAN), a speech-recognition software firm that’s helping the health care industry shift to electronic clinical records, climbed 112% over the past 12 months.
Shares in Western Digital (WDC) a maker of data storage drives, tumbled 24% over the past year after sales of some products slowed. Oregon utility Portland General Electric (POR) slipped 23% under pressure from the region’s wildfires and a loss in the third quarter. Still, Keith says, both companies have strong long-term growth prospects.
The pair are focused on resilient businesses that will emerge stronger from the pandemic. “Companies investing in research and development, in their workforces, and in technology will gain market share and accelerate growth,” says Keith. An example is waste-collection firm Republic Services, which is enhancing tools on its website and mobile app to improve customer experience.
-
Visa Is the Worst Dow Stock Wednesday. Here's WhyVisa stock is down sharply Wednesday after the credit card company came up short of revenue expectations for its fiscal Q3.
-
Another Analyst Moves to the Sidelines on Tesla Stock After EarningsTesla stock is spiraling Wednesday after the EV maker's big earnings miss and Wall Street has been quick to weigh in. Here's what you need to know.
-
6 Best Books on Investinginvesting These six books will help you be a better investor.
-
Bond Basics: Zero-Coupon Bondsinvesting These investments are attractive only to a select few. Find out if they're right for you.
-
Bond Basics: How to Reduce the Risksinvesting Bonds have risks you won't find in other types of investments. Find out how to spot risky bonds and how to avoid them.
-
What's the Difference Between a Bond's Price and Value?bonds Bonds are complex. Learning about how to trade them is as important as why to trade them.
-
Bond Basics: U.S. Agency Bondsinvesting These investments are close enough to government bonds in terms of safety, but make sure you're aware of the risks.
-
Bond Ratings and What They Meaninvesting Bond ratings assess the creditworthiness of your bond issuer, can help limit your risk of default and maximize yield.
-
Bond Basics: U.S. Savings Bondsinvesting U.S. savings bonds are a tax-advantaged way to save for higher education.
-
Bond Basics: Treasuriesinvesting Understand the different types of U.S. treasuries and how they work.
