10 Best Mutual Fund Managers of 2022 and Their Top Stock Picks

In this piece, we will take a look at best mutual fund managers of 2022 and their top stock picks.

It was arguably one of the most challenging years after two years of relentless stock market uptick. As inflationary pressure ballooned, compounded by an aggressive push by policymakers to hike interest rates, fund managers found the going tough in 2022 in the race to match their previous year’s returns. In previous years, fund managers benefited from abundant liquidity and low-interest rates to strike gold in the equity markets. That was not the case, as traditional market darlings and growth stocks remained under immense pressure in 2022.

In a year when skyrocketing interest rates and sky-high inflation threatened to push the S&P 500 into bear market territory after a 19% plunge, fund managers found the going tough amid the soaring bearish pressure. The fact that an estimated $8.2 trillion of stock market wealth evaporated in thin air underscores how tricky the investment environment was.

Only 28% of stocks in the S&P 500 posted gains last year. Therefore, to outperform the markets, fund managers had to own the shortlist of the stocks and have limited exposure to some of the plays that were under immense pressure.

Occidental Petroleum Corporation (NYSE:OXY) was one of the stocks that outperformed the market, rallying 119.1%, followed by Hess Corporation (NYSE:HES), up 94.1%, and Exxon Mobil Corporation (NYSE:XOM), up 87.4%. Marathon Petroleum Corporation (NYSE:MPC) also topped the charts rallying 86.6%, with Schlumberger Limited (NYSE:SLB) summing up the top 5 stocks on rallying 81.2%. Energy stocks dominating the segment came as oil prices powered through the $ 100-a-barrel barrier.

Since the energy sector accounts for less than 5% of S&P 500 assets, compared to 27% for tech stock, it took a lot of work for mutual funds to outperform. Fund managers with strong exposure to tech stocks felt the brunt of the bearish momentum in the market.

Out of the 1,410 actively managed mutual funds surveyed, only 40 were able to finish the year on a positive territory. On the other hand, the average loss of the entire group was about 18.2%, in line with the 19% average loss of the S&P 500 before dividend payments.

The best-performing fund managers benefited from taking outsize positions in the energy sector as it was one of the 10 industries to record a gain. Energy stocks delivered an average return of 59%. Nevertheless, as the year came to a close, there was a significant shift to other sectors as oil prices started edging lower.

In addition to betting on energy stocks, the best-performing mutual funds benefited from their diversified holdings. As the year came to a close, tech plays led by NVIDIA Corp (NASDAQ:NVDA), Tesla Inc. (NASDAQ:TSLA), and Microsoft Corporation (NASDAQ:MSFT) started gaining their footing as the artificial intelligence story started gaining momentum.

BlackRock Inc. (NYSE:BLK) is the world’s largest asset manager, with assets under management worth over $10 trillion. Vanguard and Charles Schwab are the other big asset managers operating some of the biggest mutual funds by asset under management. Nevertheless, the firms did not make the list of the best-performing mutual funds of 2022 as they struggled to generate significant returns amid the bear run.

Our Methodology

While there is no doubt that 2022 was a challenging year on the investment front, some fund managers were still able to come out on top and steer the funds into generating significant returns. While the majority of the funds finished the year in the red, some registered significant returns on investing in a wide range of assets and diversifying away from the equity markets.

Our list of the best mutual fund manager in 2022 consists of funds that returned over 14% despite the bearish run in the market. Most of the funds on the list had big bets on government treasuries and bonds that benefited from an increase in interest rates around the globe. Additionally, some of the funds benefited from energy stocks outperforming the overall market.

Best Mutual Fund Managers 2022 and Their Top Stock Picks

10. Fidelity Latin America Fund (NASDAQ:FLATX)

Full-year 2022 gain: 1.37%

Expense ratio: 1.06%

TTM Yield: 7.94%

Fidelity Latin America Fund (NASDAQ:FLATX) is a mutual fund that focuses on generating long-term capital growth by investing at least 80% of its assets in Latin America Securities. it normally invests in  common stocks  and allocates investment across different Latin American countries.

Financial services account for the biggest share of the fund’s holdings at 25%, followed by healthcare at 18% and Industrials at 13.97%. Currently, Fidelity Latin America Fund maintains holdings in Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR), Genomma Lab Internacional, S.A.B. de C.V. (LABB.MX), Afya Limited (1AY.F), and Hypera S.A. (OTC:HYPMY).

With about $280 million in assets under management, the fund was up by 1.37% in 2022, better than the 19% loss for the S&P 500.

9. T. Rowe Price New Era Fund (NASDAQ:PRNEX)

Full-year 2022 gain: 7.2%

Expense ratio: 0.74%

TTM Yield: 4.37%

T. Rowe Price New Era Fund (NASDAQ:PRNEX) is a $2.84 billion mutual fund that seeks to provide long-term capital growth by investing in companies with exposure to some of the most sought-after natural resources. Consequently, it invests about two-thirds of its total assets in common stocks of natural resource companies that benefit during high inflation periods.

T. Rowe Price New Era Fund also invests in other asset classes that asset manager Shinwoo Kim believes have strong potential for earnings growth but do not develop their own natural resources. Consequently, it mostly invests in energy stocks followed by basic materials and industrials. Some of its biggest holdings include TotalEnergies SE (NYSE:TTE), Exxon Mobil Corp, and ConocoPhillips (NYSE:COP). Last year, the fund returned 7.22%.

8. DWS Latin America Equity Fund (NASDAQ:SLAFX)

Full-year 2022 gain: 12.62%

Expense ratio: 1.21%

TTM Yield: 6.24%

DWS Latin America Equity Fund (NASDAQ:SLAFX), with $402 million in assets under management, is an ideal mutual fund for investors eyeing exposure to Latin America equities. The fund invests at least 80% of its assets in Latin American common stocks and other equities. It may invest 20% of its assets in US equities and Latin America assets.

DWS Latin America Equity Fund’s primary goal is to generate capital appreciation through its investments. Likewise, some of its biggest holdings include Banco do Brasil S.A. (OTC:BDORY), Grupo Financiero Banorte SAB de CV, B3 S.A. – Brasil, Bolsa, Balcão (BOLSY) and Localiza Rent a Car S.A. (OTC:LZRFY).

William Scott Piper, as the manager, steered DWS Latin America Equity Fund to a 12.62% return last year.

7. EIP Growth and Income Fund Investor Class (NASDAQ:EIPFX)

Full-year 2022 gain: 16.07%

Expense ratio: 1.65%

TTM Yield: 4.83%

EIP Growth and Income Fund Investor Class (NASDAQ:EIPFX), with $103.8 million in assets under management, is a fund that seeks a high level of total shareholder return balanced between current income and growth. The fund’s managers, James J Murchie, and Eva Pao, invest primarily in equity securities of energy companies involved in steady fee-for-service infrastructure. They may also invest in energy corporations.

Some of EIP Growth and Income Fund Investor Class’s biggest holdings include Energy Transfer LP (NYSE:ET), Magellan Midstream Partners, L.P. (NYSE:MMP), Enterprise Products Partners L.P. (NYSE:EPD), and DT Midstream, Inc. (NYSE:DTM). Under normal circumstances, it invests in equities that seek to pay dividends or distribute a portion of the income of distributable cash flows.

Last year, EIP Growth and Income Fund Investor Class was up by 16.07%, outperforming the S&P 500 that was down by about 19%.

6. Goldman Sachs Energy Infrastructure Fund Investor Shares (NASDAQ:GLEIX)

Full-year 2022 gain: 21.08%

Expense ratio: 1.22%

TTM Yield: 3.78%

Goldman Sachs Energy Infrastructure Fund Investor Shares (NASDAQ:GLEIX) is a four-star mutual fund that seeks total return through current income and capital appreciation. Under normal circumstances, it invests at least 80% of its assets in U.S. and non-U.S. equity or fixed-income securities issued by energy infrastructure companies.

Mathew Cooper and Kyri Loupis, as the managers, seek to concentrate the funds’ investments in the energy sector. Cheniere Energy, Inc. (NYSE:LNG), Targa Resources Corp. (NYSE:TRGP), Enbridge Energy Transfer LP, and Plains GP Holdings, L.P. (NASDAQ:PAGP) account for the biggest weight of the fund. Likewise, the fund returned 21.08% in 2022, making it one of the best-performing funds.

5. Goldman Sachs Energy Infrastructure Fund Class P (NASDAQ:GAMPX)

Full-year 2022 gain: 21.37%
Expense ratio: 1.09%
TTM Yield: 3.90%

With about $389.18 million in assets under management, Goldman Sachs Energy Infrastructure Fund Class P (NASDAQ:GAMPX) returned 21.37% in 2022. The fund invests at least 80% of its total holdings in US and non-US equity or fixed-income securities issued by energy infrastructure companies. Consequently, it mostly concentrates its investments in the energy sector.

The energy sector accounts for 97% of Goldman Sachs Energy Infrastructure Fund Class P’s total holdings, followed by utilities at 1.42% and Basic Materials. Cheniere Energy, Inc. (NYSE:LNG), Targa Resources Corp, Enbridge Inc. (NYSE:ENB), and Energy Transfer LP (NYSE:ET) account for the biggest holdings of the mutual fund

4. Vanguard Energy Fund (NASDAQ:VGENX)

Full-year 2022 gain: 23.69%
Expense ratio: 0.46%
TTM Yield: 4.67%

Vanguard Energy Fund (NASDAQ:VGENX) is a four-star mutual fund, according to Morningstar, with $5.60 billion in assets under management. Managed by Thomas Levering, the fund invests in US and non-US companies engaged in energy-related energy services such as producing and transmitting energy and energy fuels.

Holdings in ConocoPhillips, Shell plc (NYSE:SHEL), BP p.l.c. (NYSE:BP), Engie SA, and Total Energies SE (NYSE:TTE) account for the biggest weight of the mutual fund. It was one of the best-performing funds returning 23.69% in 2022.

3. Goldman Sachs MLP Energy Infrastructure Fund (NASDAQ:GMNPX)

Full-year 2022 gain: 26.17%
Expense ratio: 2.21%
TTM Yield: 6.59%

Goldman Sachs MLP Energy Infrastructure Fund (NASDAQ:GMNPX) is a mutual fund managed by Kyri Loupis, a Mathew Cooper, focusing on North American energy sector investments. It mostly invests in energy infrastructure assets that satisfy energy needs, including pipelines, storage tanks, and processing.

Energy Transfer LP, MPLX LP (NYSE:MPLX), Western Midstream Partners, LP (NYSE:WES), and Enterprise Products Partners .LP. (NYSE:EPD) account for the fund’s biggest holdings in the energy sector. As the companies benefited from high energy prices in 2022, the mutual fund generated a 26.17% return making it one of the best performing.

2. Hennessy Midstream Fund (NASDAQ:HMSFX)

Full Year 2022 Gain: 28.82%
Expense ratio: 1.76%
TTM Yield: 10.65%

Hennessy Midstream Fund (NASDAQ:HMSFX) is one of the mutual funds that benefited from the outperformance of the energy sector as oil prices powered through the $ 100-a-barrel level in 2022. The fund, which seeks capital appreciation through distribution growth and current income, allocated at least 80% of its net assets to midstream energy infrastructure companies.

Benton D Cook and L Joshua Win were the fund managers that steered to fund into returning 28.82% in 2022. Some of Hennessy Midstream Fund’s biggest holdings include Energy Transfer LP, Plains All American Pipeline, L.P. (NASDAQ:PAA), Enterprise Products Partners L.P. (NYSE:EPD), and MPLX LP (NYSE:MPLX).

1. AQR Style Premia Alternative Fund (NASDAQ:QSPNX)

Full-year 2022 gain: 30.28%
Expense ratio: 1.77%
TTM Yield: 21.41%

AQR Style Premia Alternative Fund (NASDAQ:QSPNX) is a mutual fund that seeks to deliver attractive risk-adjusted returns with low correlation to traditional stock and bond portfolios. It invests in a broad and diversified range of alternative risk assets, from stocks to equity indices, fixed income, commodities, and currencies.

Cliff Asness is the managing and founding principal, assisted by Jordan Brooks and Andrea Frazzini. AQR Style Premia Alternative Fund has significant exposure to the industrial and financial sectors. Some of its biggest holdings are in Leonardo SpA (OTCMKTS:FINMF), Tenaris S.A. (OTCMKTS:TNRSF), Stellantis N.V. (NYSE:STLA), and Assicurazioni Generali S.p.A. (G.MI)

AQR Style Premia Alternative Fund was on an impressive run in 2022, returning 30.28% and outperforming the S&P 500, which was down by about 19%.

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This article is originally published at Insider Monkey.