The Mairs & Power Growth Fund (MPGFX) tilts toward growth stocks in companies of any size that trade at reasonable prices.
It also has a regional quirk: The majority of the fund’s companies must be based in the upper Midwest, near the fund managers’ St. Paul, Minnesota, home base.
In the past, the fund’s regional focus meant the portfolio had a heavy tilt toward the industrial, financial and health care sectors.
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But in recent years, managers Andy Adams and Peter Johnson have picked up shares in tech stocks – at the right price, of course – including Nvidia (NVDA), Microsoft (MSFT) and Amazon.com (AMZN), among others.
Those shares are among the fund’s top holdings now, and they have been in retreat for much of the first four months of the year.
As a result, Mairs & Power Growth lost 7.5% for the year to date through April, lagging the 5.1% decline in the S&P 500 Index. Over the past 12 months, the fund’s 5.0% gain lagged the S&P 500 by a wide margin as well.
Even so, many of the fund’s financial stocks advanced, including JPMorgan Chase (JPM), Fiserv (FI) and Visa (V). All have posted double-digit gains over the past 12 months, which helped the fund’s return.
Gains in Swiss pharmaceutical firm Roche Holdings (RHHBY) and utility company WEC Energy Group (WEC) provided a lift, too.
We’re watching the fund – which is a member of the Kiplinger 25, our favorite no-load mutual funds – closely. Tech stocks make up 34% of the portfolio, above average for its peer group and up from a small exposure a decade ago.
During the selloff, the managers added another tech stock, Taiwan Semiconductor Manufacturing (TSM), to the portfolio (albeit at discounted prices).
This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.