Small-capitalization stock managers dominated Pensions & Investments' Performance Evaluation Report overall equity performance results for the quarter and 12 months ended Sept. 30 in both the commingled and managed account categories.
While small-cap managers clearly were ahead of the pack, a few contrarian managers also made an appearance on the list of best performing equity managers.
Kopp Investment Advisors, Edina, Minn., topped the PIPER managed account performance for the quarter with 22.58% in its emerging growth equity portfolio, followed by Apodaca-Johnston Capital Management, San Francisco, with 21.1% in its small growth equity portfolio. Amerindo Investment Advisors Inc., San Francisco, came in third for the quarter, with a 20.68% return in its U.S emerging growth portfolio.
By comparison, the median PIPER equity manager returned 5.2% for the quarter; the Standard & Poor's 500 Stock Index was up 4.89%, and the Russell 2000 was up 6.94%.
GEM Capital Management Inc., New York, was the top performing fund manager in the PIPER commingled equity fund universe for the quarter with 17.51%, followed by Chancellor Capital Management, with 16.3% for its small-cap growth fund and Diversified Investment Advisors with 15.5% in its equity growth fund.
Jerry Apodaca Jr., chief investment officer at Apodaca-Johnston, sounded a theme repeated by several of the top performing PIPER managers with a small-cap approach. He said the firm maintains a fully invested position and was heavily committed to technology stocks during the quarter.
Apodaca-Johnston had significant holdings of Microtouch Technology Inc., Ultratech Stepper Inc. and Proxima Corp.
Lee Kopp, chief investment officer at Kopp Investment Advisors, said his firm also benefited from its commitment to technology and telecommunications stocks.
"Our whole emphasis has been on small- and midcap corporate America," Mr. Kopp said. "A lot of that emphasis has been on technology and telecommunications."
Mr. Kopp said he expects small-cap and technology stocks to continue to do well during the next several months and years.
"If this were a ball game, this is the third or fourth inning for technology and small-cap stocks," said Mr. Kopp.
Major holdings in the Kopp portfolio include Stratocom Inc., Tellabs Inc., and ADC Telecommunications Inc.
While small-cap managers were clearly the most heavily represented equity management style in the PIPER overall performance for the quarter and year, a few contrarians popped up after a long absence.
Meridian Management Co., Little Rock, Ark., finished fourth overall for the 12 months ended Sept. 30 at 18.15% for its commingled contrarian fund. United Capital Management, Denver, was third overall among PIPER commingled equity fund with a return of 19.28% in its contrarian equity fund.
Lee Bodenhamer, chief investment officer at Meridian, said the commingled contrarian fund is managed by Meridian for Worthen National Bank, Little Rock, and follows a value-oriented investment style with a contrarian bias.
He said the fund started building positions in some out-of-favor sectors such as basic industry, capital goods and economically sensitive stocks in 1991-'92.
Now, he said, "these stocks have become popular again and we are in the process of trying to decide when to move out of them."
During the 12-month period, the Meridian fund had major holdings in Sterling Chemicals Inc., IBM Corp., Alumax Inc., Inland Steel Corp. and Caterpillar Inc.
For the 12 months ended Sept. 30, the median PIPER equity fund manager was up 2.9% while the median managed account manager was up 3.7%. The S&P 500 was up 3.69% for the period.
F.X.C. Investors Corp., New York, topped the list of PIPER managed accounts for the 12 months with a return of 43.63%, followed by the Crabbe Huson Group Inc., Portland, Ore., with a return of 28.29% on its small-cap equity portfolio and Richard C. Blum & Associates Inc., New York, with 27.71% in its strategic block value portfolio.
For the PIPER commingled manager universe, Boston Co. Institutional Investors Inc., Boston, topped the list for the year with a return of 25.05% in its midcap equity portfolio. It was followed by GEM Capital, with a 20.87% return on its special equity limited portfolio and United Capital Management, Denver, with 19.28% on its contrarian equity portfolio.