Insights from a seasoned investor: Unveiling the strategy behind selecting growth stocks in Microsoft and Nvidia

Investing in the Harbor Capital Appreciation fund may seem like a play on momentum stocks, given its top holdings in companies like Microsoft, Nvidia, and Apple. However, a closer look reveals that these bets have been in place for several years, showing a commitment to long-term growth.

Managed by Jennison Associates since 1990, the Harbor fund has a history dating back to 1987. Blair Boyer, a managing director at Jennison, leads the investment team in identifying companies with strong growth potential. By focusing on secular growth stories and above-average rates of growth in revenue, operating margins, and net income, the team aims to back long-term winners.

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Despite changes in management, the fund has remained consistent in its investment strategy, leading to impressive performance over the past decade. With a three-star rating from Morningstar and outperforming its category and index, the Harbor fund has consistently delivered strong returns to investors.

The fund’s top 10 holdings, concentrated in tech stocks with a few exceptions, reflect the team’s strategy of investing in companies with sustainable growth opportunities. Visa, Mastercard, and Amazon are just a few examples of companies that have delivered “second and third acts” as the digital landscape evolves.

Boyer’s team employs a disciplined approach to portfolio management, adding new stocks while maintaining a fully invested portfolio. By diversifying across different growth buckets and continuously monitoring the performance of holdings, the team aims to reduce risk while maximizing returns for investors.

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With a strong start in 2024 and a track record of success, the Harbor Capital Appreciation fund continues to be a compelling option for investors seeking long-term growth opportunities.

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