"Winning move" on the US mutual fund ranking: Did they buy it? How much did they buy Nvidia?

Whether or not NVIDIA becomes one of the largest shareholders is a key factor for funds to enter the "winner's circle".

In the ranking of actively managed funds with the best 12-month total return as of October 1, 2023, the proportion of growth stocks is crucial.

As the most outstanding growth stock this year, NVIDIA's stock price has risen by more than 220%, making it a common bet for top stock funds.

The Loomis Sayles investment team, which manages three of the top five stock funds, is one such example: all three funds hold shares of NVIDIA. Among them, the fourth-ranked Victory Growth Fund holds 6.88% of NVIDIA's shares, while the best-performing fund this quarter, Loomis Sayles Growth, and the third-ranked Nationwide Loomis All Cap Growth both hold 7.88%.

"For fund managers like us, buying on dips is an important strategy," said Aziz Hamzaogullari, Chief Investment Officer and founder of the growth stock strategy at Loomis Sayles. He emphasized the importance of valuation in his investment methodology. His team bought NVIDIA shares in 2019 when the stock price suffered a 40% sell-off:

"We took advantage of the opportunity of the price drop. We wanted to buy high-quality companies that can generate growth for a long time and are difficult to disrupt even if challengers have time and capital. When they are trading at a significant discount, we want to be buyers."

The Fidelity Blue Chip Growth K6 fund managed by Sonu Kalra also holds a 10% stake in NVIDIA, as well as many Netflix and Meta stocks (which have also performed well in Loomis Sayles), placing the fund in the second-highest position on this quarter's list.

Kalra has been following NVIDIA since 2017 and has been a supporter of the AI sector. However, as the industry trends become clearer and investors become less patient, he has also expressed some concerns about the lack of momentum for further growth in the AI sector. According to him, it is difficult to say whether this turbocharged environment will continue, as it depends on whether companies can achieve sustained profit growth.

He believes that NVIDIA's valuation is currently at an "unrealistically high level". In fact, well-known tech blogger Pete Warden has pointed out that NVIDIA's GPU dominance is built on the current industry's mainstream demand for LLM training. If reasoning becomes more mainstream in the future, the winner will shift from NVIDIA to CPU manufacturers, which also confirms Stone Sister's previous inference: "The next wave of opportunities in AI lies in software".

Alex Umansky, the manager of the seventh-ranked Baron Durable Advantage Fund, expressed the desire to invest in more mature companies with a history of profit creation and little to no debt.