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Without large holdings in tech stocks, US equity funds underperform bull run

Jeffrey Tan
Jeffrey Tan12/11/2017 08:00 AM GMT+08  • 7 min read
Without large holdings in tech stocks, US equity funds underperform bull run
SINGAPORE (Dec 11): It has been a banner year for the US stock market, but the majority of US equity funds registered for sale in Singapore have failed to beat the main benchmark indices. The few that outperformed did so on the back of exposure to fast-g
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SINGAPORE (Dec 11): It has been a banner year for the US stock market, but the majority of US equity funds registered for sale in Singapore have failed to beat the main benchmark indices. The few that outperformed did so on the back of exposure to fast-growing large-cap technology stocks.

Notably, the FAANG stocks — comprising social media giant Facebook, smartphone manufacturer Apple, e-commerce giant Amazon.com, digital entertainment provider Netflix and Google, whose parent company is Alphabet — are up between 28% and 51% this year. The Standard & Poor’s 500 and Dow Jones Industrial Average, which have been breaching all-time highs recently, are up 17.9% and 22.9%, respectively, this year. The Nasdaq Composite Index reached an all-time high of 6,912.358 points on Nov 28. It is up 25.9% in the same period.

According to Morningstar data, none of the 64 US equity funds registered for sale in Singapore beat the Dow Jones and Nasdaq indices this year. Only seven US equity funds beat the S&P 500. Among them is the Loomis Sayles US Growth Equity Fund, which returned 20.9% in the year-to-date period to Dec 4. Technology stocks accounted for 44.8% of its portfolio. Its second-largest allocation was in healthcare stocks, accounting for 15.7% of its portfolio. Consumer staples accounted for 12.9% of the portfolio. Its top three holdings are US-listed Chinese e-commerce giant Alibaba Group Holding, Facebook and Amazon.

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