What a difference a year makes.
Equity returns in the third quarter of 2002 were the worst since the 1987 stock market crash, but just one year later, returns are reminiscent of those from the bull market of the late 1990s. For managed domestic overall equity accounts, the median one-year return for the period ended Sept. 30 reached a sizzling 25.6%, according to PIPER, a manager performance database owned by Pensions & Investments. That return compares with 24.4% for the Standard & Poor's 500 stock index.
What's more, those numbers were repeated across many sectors, with managed domestic value equity accounts pulling in a 26.4% median return for the one-year period; managed domestic growth equity accounts returning 26.3%; and international equity accounts showing a 27.4% median return for the period.
A year ago, "the number of undervalued stocks was considerable," said Stephen M. Coleman, portfolio manager and chief investment officer of Daedalus Capital LLC, St. Louis. Because of that, he said he was able to switch out of the big-cap industrial stocks he was holding to weather the bear market and put money to work in issues like telecommunications giant Nortel Networks Corp., optical fiber maker Corning Inc. and cable company Charter Communications Inc. Daedalus' Capital Focused Equity portfolio topped the one-year charts with a whopping 208.8%.
Rounding out the top performers for the 12 months were Walnut Creek, Calif.-based Insight Capital Research & Management Inc.'s Small Cap Growth account, with a stunning 122.2%; Birmingham, Mich.-based Munder Capital Management's NetNet portfolio, 92.1%; Insight's institutional small-cap growth portfolio, 88.1%; and the SMID Cap Value portfolio of David J. Greene & Co. LLC, New York, at 87.5%.