When it comes to equity portfolio performance, size matters. And so does energy.
Small-cap and energy portfolios continued their reign as the top-performing equity separate accounts for the year ended June 30, according to data released by Morningstar Inc., with two energy strategies managed by BlackRock Inc., New York, taking the top two spots. BlackRock's small-cap energy portfolio returned 49.9% while its all-cap energy approach gained 49.2%.
The latest data continued what is shaping up to be a tradition in the Morningstar Separate Account/Commingled Fund Database: small-cap and energy stocks drive performance these days. Indeed, five of the 10 best-performing accounts included in the Morningstar data were small-cap portfolios, while three of the top performers came from the energy category.
The strong showing by small-cap and energy portfolios helped drive the median return for the composite U.S. stock category to 11.7% for the year. By comparison, the S&P 500 index gained 6.6% for the 12-month period, while the Russell 3000 index returned 9.6%. The small-cap oriented Russell 2000 index returned 14.6% for the year. The Dow Jones Energy index returned 26.3% for the year.
Following the BlackRock portfolios, in third place, was a small-cap strategy from Insight Capital Research & Management, Walnut Creek, Calif., which returned 45.4%, followed by the small-cap to midcap value portfolio of Lord Abbett & Co., Jersey City, N.J., which gained 44.6%.
The small-cap growth strategy from San Francisco-based Wells Capital Management snagged fifth place with 43.7%, followed by a classic hedge fund and concentrated-growth strategy, both managed by Husic Capital Management, San Francisco. Husic's hedge fund returned 42.4%, and the growth portfolio returned 41.4%. Mandeville, La.-based Orleans Capital Management Corp.'s energy portfolio was next with 41.3%, followed by a small-cap growth approach managed by Husic that gained 41.2%. A small-cap strategy run by Boston Asset Management Inc., Clearwater, Fla., filled out the top 10 with a return of 40.9%.
Ironwood Capital Management, Boston, which snagged the top spot in the second quarter with its small-cap growth portfolio, was knocked out of the top 10 for the most recent period.