Zevenbergen Genea doesn't exactly roll off the tongue. But so far, the $5.7 million fund is on a roll.
The fund, which trades under the ticker ZVGNX, is a concentrated, go-anywhere fund that is largely focused in technology. So far this year, it's up 35.9%, versus 11.9% for the Standard & Poor's 500 stock index. The fund has soared 20.3% since its August 31, 2015 launch, versus 13.9% for the S&P 500.
One other thing stands out about the tech-heavy growth fund: Three of its five-person management team including the management company's founder, Nancy Zevenbergen, are women. Ms. Zevenbergen started Seattle-based
Zevenbergen Capital Management in 1987. It now has $2.5 billion in assets.
It's unusual for women to dominate in either asset management or technology, yet at Zevenbergen Capital Management, it's the norm. Ms. Zevenbergen added two other women to the team: Brooke de Boutray, in 1992, and Leslie Tubbs in 1994. Joseph Dennison came on in 2009 and another co-manager, Anthony Zackery, started in 2011.
"Between the five of us on the team, we see a lot of things in different ways," Mr. Dennison said. "We all share one table, we sit together, we spend a lot of time bouncing ideas off each other."
Their goal: "We look for long-term, high-growth companies with managers who are visionary entrepreneurs," said Mr. Dennison. But how can you tell a Jeff Bezos from a
Joe Btfsplk, the luckless cartoon character who always had a storm cloud over his head?
Zevenbergen management wants stocks of companies run by their founders — and those founders must be able to articulate their vision for the long term, be invested in the company's stock, and unafraid to make decisions, Mr. Dennison said. Those broad outlines have led the fund to companies like
Amazon (AMZN), the fund's top holding, which dominates the online retail sector, and
Tesla (TSLA), the fund's second-largest holding, whose early innovation in electric cars has given the company commanding growth in the auto sector.
It has also led it away from companies with hot new hardware, such as GoPro. "It's hard if you have a product that can be commoditized," Mr. Dennison said.
Clearly, management isn't the only thing that leads Zevenbergen Genea to new stocks. Balance sheets and filings are important. And so is simple observation. "It's amazing where you can find new ideas," Mr. Dennison said. "We're fortunate to be in Seattle, where lots of people are early adapters. It's hard to undervalue the importance of watching what people are actually using. A lot of companies have a steep inflection in their growth, and we want to be early on that curve."
The Zevenbergen Genea fund isn't for the faint of heart. It has 23 holdings, and Amazon, Tesla and Netflix (NFLX) accounted for 26.3% of its portfolio as of the end of March, according to Morningstar. The fund has 40% of its assets in tech and 47% in consumer cyclical stocks, with nothing in healthcare, utilities, energy or communications services.
A more diversified offering, Zevenbergen Growth (ZVNBX), has 40 holdings, and made its debut at the same time as Zevenbergen Genea. It's up 24.9% this year, according to Morningstar.
For a look at how Zevenbergen Capital runs money over the long term, look at RidgeWorth Innovative Growth Stock Fund (SAGAX), which has gained 8.6% a year the past 10 years, vs. 7.1% for the S&P 500. That outperformance comes with risk: The fund's 10-year standard deviation clocks in at 21.6, vs. 15.2 for the S&P 500, according to Morningstar. But at least by modern portfolio statistics, the returns have outweighed the risks: The fund carries a Sharpe ratio of 0.48 and a 1.04 alpha.
