He had more than doubled his bet on Netflix since June, holding 1.1 million shares at the end of February, according to the latest available fund disclosures. But Netflix shares are off about 23 percent in the past month. His largest holdings included recent losers like Google Inc, Facebook Inc, Biogen Idec Inc and Amazon.com Inc. On Thursday morning, Google's shares declined after reporting disappointing first-quarter results.
Workday, a darling of the software as a service movement, also likely hurt Danoff and a number of other mid-cap and large-cap managers. Its shares are down 22 percent in the past month, after more than doubling in the 10 months to February. Danoff more than doubled his stake in Workday over a recent eight-month period, fund disclosures show. At the end of February, Contrafund owned about 7 percent of Workday's outstanding shares.
The stock market's two-week revolt against momentum stocks has knocked 2.3 percent off the value of the average U.S. mutual fund, sparing only a handful of money managers who favored gold and emerging markets over cloud software and biotech.
"We've seen a collapse in the dream stocks," said AllianceBernstein's Gerry Paul, who directly manages $13 billion as chief investment officer of U.S. value funds. To be sure, some of these stocks are coming down from lofty highs - having recorded big gains for their owners last year - and will remain staples in mutual fund portfolios.
Among the worst performers, the $527 million Buffalo Emerging Opportunities Fund was down 10 percent during the first two weeks in April after putting up 42 percent average annual gains since the stock market's nadir in March 2009.
It is the worst performing small-cap fund with at least $500 million in assets, according to Lipper. The average small-cap fund fell 4.35 percent in the two weeks, according to Lipper.
Two of portfolio manager John Bichelmeyer’s largest additions to the fund last year, manufacturing software and consulting firm PDF Solutions Inc and cloud software company Proofpoint Inc., continued to sour in April. Proofpoint is down 34 percent in the past month. Bichelmeyer did not return messages seeking comment.
Meanwhile, some managers have found an easier way to sleep.
They prefer companies with free cash flow yields that top 10 percent. Technology behemoth Hewlett-Packard Co and video games retailer GameStop Corp, for example, meet that criteria and their shares have climbed 12 percent and 5 percent, respectively, in the past month.
The $2.5 billion Cullen High Dividend Equity Fund was off only 0.36 percent in the first two weeks of April. That put it at the top of the heap among large cap funds with at least $500 million in assets, Lipper said. Portfolio manager James Cullen has been rewarded for avoiding tech's high flyers.