Jerry Jordan beat all rivals this year as his Jordan Opportunity Fund purchased steel and oil shares and pulled out of financial stocks...
Jerry Jordan beat all rivals this year as his Jordan Opportunity Fund purchased steel and oil shares and pulled out of financial stocks.
Jordan, who oversees $500 million as president of Boston-based Hellman Jordan Management Co., put 45 percent of his stock mutual fund in oil and materials, which have surged along with other commodities. He cut holdings in financial stocks to 5 percent from 15 percent in June, as losses from subprime mortgages spread through banks and brokers.
The moves helped Jordan’s $72 million fund gain 4.8 percent this year as of April 8, the most of 509 large-company growth funds tracked by Chicago-based research firm Morningstar.
The Standard & Poor’s 500 Index dropped 7 percent in the same period on increasing signs the U.S. economy is heading into a recession.
Most Read Business Stories
- 6 Dr. Seuss books won't be published for racist images
- Frontier cancels flight, citing maskless passengers
- Biden vows enough vaccine for all US adults by end of May
- Amazon sued by Black cloud-computing manager over alleged racial discrimination and sexual harassment
- Texas becomes biggest US state to lift COVID-19 mask mandate
“Energy is going to be enormous this year,” Jordan, said in an interview. “We went piling into steel stocks in December and January” on expectations that low inventories would boost prices, he said,
Jordan Opportunity Fund owns shares of about 40 companies, which have an average market capitalization of $20 billion, Morningstar’s data show. The fund, which invests in companies with above-average earnings growth, has advanced 19 percent during the past three years to rank as the fifth-best fund in its group, more than triple the pace of competitors.
“It has been a fairly volatile three years and the fund has held up well in a variety of markets,” said David Kathman, an analyst at Morningstar. “Still, it’s a fairly concentrated portfolio, which has some risks.”
The fund has a three-year Sharpe ratio of 1.04, compared with 0.2 for competing funds, according to Morningstar. A higher Sharpe ratio means better risk-adjusted returns. The fund has Morningstar’s highest ranking of five stars.
Seven of the fund’s 10 largest holdings as of April 7 were energy or materials companies. Its main steel picks included U.S. Steel, the largest U.S.-based producer, which accounted for 5.6 percent of assets, and Nucor, representing 4.2 percent of assets. The fund has also added Luxembourg-based Tenaris, the world’s largest maker of seamless steel pipes, which accounts for about 2 percent of assets, Jordan said.
The fund’s energy holdings include Transocean, the world’s largest offshore oil driller, which accounts for 5.4 percent of assets, and Weatherford International, which represents 4.4 percent. Houston-based Transocean climbed 3.5 percent this year and Weatherford, also based in Houston, advanced 8.8 percent.