Forget diversification. Jerry Jordan would rather make bold bets on a small number of fast-growing companies. Using this concentrated approach, Jordan Opportunity fund has made a strong impression in a short period. The $27-million fund, which invests mostly in large companies, has topped Standard & Poor's 500-stock index by an average of six percentage points a year since its January 2005 launch. In 2007 through mid September, it earned 21%, beating 99% of diversified U.S. stock funds.
A version of Opportunity was launched in 1992 as a private partnership. Jordan began running it in 1997, then converted it to a mutual fund eight years later. Opportunity (symbol JORDX) requires $10,000 to start and charges 1.59% in annual fees.
Jordan focuses on themes. He looks for four to six Rbig changes that will drive businesses for big reasons.S He's bullish on energy, which accounts for more than 25% of assets. "The stocks have been priced as if the energy cycle were over," he says. Among his holdings are energy-services giant Schlumberger and offshore-drilling contractor Transocean. Jordan has also been investing in medical-device firms, which he thinks will sustain earnings growth even if the economy slows.
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In addition to concentrating his picks, Jordan trades quickly (turnover is 304%, implying that the entire portfolio is replaced every four months), and he can also bet against the stock market. If this assertive strategy sounds familiar, it may be because it looks a lot like that of a fellow Bostonian, Ken Heebner, manager of Kiplinger 25 member CGM Focus. If Jordan comes anywhere near Heebner's record, his clients will be delighted.
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