The No. 1 stock picker in America in 2015 is no alpha-male. She’s Deena Friedman, manager of the Fidelity Select Retailing Portfolio, which is giving investors a bonanza using an old-fashioned strategy that’s a bit of a rebuke to a lot of her swashbuckling peers.
Her secret is no secret at all: faith in retail companies and the time-tested principles of value investing. Anyone wondering about the strength of the American economy so far this year need look no further than consumer discretionary firms. They outperformed the 10 industry groups of the Standard & Poor’s 500 Index with a return of 10.5 percent (healthcare gained 7.5 percent while the S&P 500 was up only 2.2 percent).
Friedman did much better. Among the 563 actively managed equity mutual funds with a minimum of $1 billion and at least 80 percent invested in the U.S., Boston-based Fidelity Retailing returned 19 percent, a superior outcome determined as much by the specific shares Friedman selected as the stocks she avoided, according to data compiled by Bloomberg. The closest competitor to Friedman’s Select Retail is the Fidelity Select IT Services fund with a return of 14 percent.
Matthew Winkler is the founding editor and editor-in-chief emeritus of Bloomberg News. He writes about markets.