The Growth Fund operated by Mairs & Power (MPGFX) shows a preference for growth shares in companies of any size, given they are traded at reasonably good prices. Furthermore, the fund displays a geographical peculiarity: most companies associated with the fund originate from the upper Midwest, near the fund managers’ location in St. Paul, Minnesota. Historically, this regional focus has resulted in a portfolio heavily weighted towards the industrial, financial, and health care sectors.
However, lately fund managers Andy Adams and Peter Johnson expanded their portfolio to include tech stocks, always ensuring attractive pricing. Key examples of tech investments are NVIDIA, Microsoft, and Amazon. These stocks are now some of the highest-value assets under the fund’s control.
Nevertheless, these lucrative stocks have experienced a downturn during the initial four months of this year. Consequently, Mairs & Power Growth experienced a 7.5% loss for this period, putting it behind the S&P 500 Index, which only declined by 5.1% over the same period.
In the last year, the fund’s 5% growth was also less than the S&P 500’s growth, trailing by a significant margin. Despite this, the inclusion of numerous financial stocks in the portfolio strengthened the fund.
JPMorgan Chase, Fiserv and Visa are notable examples of financial stocks that have risen, all demonstrating double-digit growth in the past year. This growth significantly contributed to the return of the fund.
Pharmaceutical giant Roche Holdings, based in Switzerland, and utility firm WEC Energy Group have also made positive gains, adding to the fund’s returns. It is worth noting that these companies’ positive performance has caught the attention of many.
Mairs & Power Growth Fund is a part of the Kiplinger 25, a list of our most favored no-load mutual funds, and hence is under our constant scrutiny. Currently, tech stocks constitute 34% of the total portfolio.
This significant portion is notably higher than many comparable funds and is a discernible shift from a decade prior when tech exposure in the portfolio was minimal. In recent times, especially during the market pullback, another tech stock has been added to the portfolio.
This new addition is Taiwan Semiconductor Manufacturing, although it was acquired at a lower price due to the market circumstances. With this in the portfolio, the fund continues to demonstrate a preference for growth, even if it means purchasing specifically discounted shares.
To sum up, Mairs & Power Growth Fund keeps true to its growth orientation, not shying away from any company size, as long as it is traded at an attractive price. It maintains a uniquely geographical focus on the upper Midwest but has shown versatility in portfolio management by including a substantial portion of tech stocks.
While the fund experienced a slowdown at the start of the year, it’s hard to ignore the performance of its financial stocks over the past year, driving the fund’s returns up. Roche Holdings and WEC Energy Group also provided an upward push.
Arriving on the Kiplinger 25 list solidifies the fund’s place among the preferred no-load mutual funds. Despite recent trials, its increased exposure to tech stocks and the new addition of Taiwan Semiconductor Manufacturing paint a picture of adaptive portfolio management, emphasizing growth and value, even during market declines.