Now look at the fund’s performance for full years 2017 through 2020 and year-to-date through Nov. That is an impressive five-year showing, which explains Morningstar’s five-star rating for the fund, within the investment research firm’s “mid-growth” category. First, look at a five-year chart showing the total return of the fund’s institutional shares against the Russell 2500 Growth Index, the two iShares ETFs and, for reference, the S&P 500 Index But in any one year, it might trail the broad market. The long-term performance of the Delaware Smid Cap Growth Fund against its benchmark has been excellent. 31 and it happens to take the Earth 365 days to go around the sun. It is also important to consider that the calendar year is arbitrary - it happens to end on Dec. If you keep chasing performance, regardless of the portfolio managers’ strategies, you might keep buying high and selling relatively low. That sort of move can backfire, as it can take many years for an equity growth strategy to play out. There is a tendency in the money management industry for investors to chase performance - that is, to move money into a fund this year that performed well last year. However, the estimated sales CAGR from 2021 through 2023 are 7.7% for the iShares Morningstar Small-Cap Growth ETFĪnd 8.9% for the iShares Morningstar Mid-Cap Growth ETFĪccording to FactSet. Comparable numbers for the fund’s benchmark, the Russell 2500 Growth IndexĪren’t available. CompanyĬalendar-year estimates are used because some companies have fiscal years or quarters that don’t match the calendar. Looking ahead, here are consensus sales estimates for the four companies’ sales (in millions of dollars) through 2023, among analysts polled by FactSet. “Everything in the portfolio has revenue growth of at least 10%,” Ely said. About half of the company’s sales are made directly to consumers through its website, according to Ely, who called the online sales momentum “massively deflationary.” It makes products for use in outdoor and recreational activities.
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With housing demand so high in the U.S., the company’s ability to install insulation at low cost makes it appealing to home builders of various sizes. Installs insulation and distributes other building products. SiteOne’s acquisition strategy in the highly fragmented landscape supply industry offers a long runway for growth and efficiency improvement, Ely said. This is an obvious play in a country that is very much on the move, as technological changes eliminate the need for some people to live within commuting distance of offices in large cities. Is “wrapping up the fragmented business of landscape distribution - dirt, topsoil, trees and gravel,” according to Ely. and the company says it is “one of the largest recyclers of waste polyethylene plastic film in North America.” Trex’s primary market is residential, but you may have seen its faux wood products used at outdoor restaurants, parks or docks. Is the world’s largest supplier of composite materials used in place of wood, including decking, fencing and railing.
He described a “pure growth approach” that avoids overconcentration in any sector or industry, and named four companies as examples held by the Delaware Smid Cap Growth Fund: He sees the digital transitions as being deflationary because of efficiency improvements, and believes these trends will mitigate inflation over the long term.īut when selecting stocks, the growth opportunities from disruptions in the economy that Ely identifies don’t necessarily spring from digital innovation. The Delaware Smid Cap Growth Fund typically holds about 35 stocks of small-cap and mid-cap companies that Ely believes are well-positioned to continue growing quickly as they take advantage of disruptive trends.ĭuring an interview, Ely said the pandemic was a “tipping point” for “massive disruptions through innovation,” including remote work and video conferencing in place of business travel, to name two examples.
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