For investors who say Nvidia Corp. is too expensive and the AI hype is overdone, a portfolio manager who trounced all his peers this year has a message—more gains to come. 

That’s the thinking of Adam Gold, whose under-the-radar Deep Growth Plus has delivered returns of more than 100% year-to-date, beating out all its separately-managed account peers in North America, according to data compiled by Bloomberg. 

The eye-popping returns came after Gold—who has owned Nvidia since 2016—snapped up more shares in December, making it the fund’s largest holding, just as the stock was capping off its worst year in over a decade. 

Gold said he built up his position in the chip maker in anticipation of the tremendous demand for its technology. The poster child for the recent AI-frenzy has seen its stock more than triple so far in 2023. Returns on the fund over the past five years have beaten a benchmark of global growth stocks.

“We were there for seven years waiting for this moment,” Gold said in a phone interview. “We were able to take advantage of a rebound—well ahead of some of the largest tech funds in the world.”

The nature of separately-managed accounts—where individual portfolios can be customized versus pooled investments like hedge or mutual funds—means Gold can be more nimble during periods of volatility. “We were able to buy when markets got depressed as opposed to typical hedge funds with a lot of leverage who usually sell at the wrong time.” 

Gold runs two funds with roughly $14 million in assets under management for the investment advisory firm he founded, Katam Hill LLC, according to Bloomberg compiled data. While Deep Growth Plus uses leverage and has the ability to short stocks and sell options his Deep Growth Fund—geared toward retirement accounts—has generated 59% year-to-date returns from long-only positions.

His strategy is to own a handful of the best performing companies as opposed to being tied to a benchmark. He sees market volatility as an opportunity to buy companies with strong fundamentals. “Just focus on owning the best performing companies at a larger size than any benchmark,” he advised.

Gold, who got his start as a portfolio manager at 25 years old, is also making short bets against some consumer discretionary companies, including Macy’s Inc. Mall-based retailers will struggle, he said, particularly those that sell brands they don’t own as they lack consumer connection.

He’s also short podcast and radio platform-owner iHeartMedia Inc. With consumers now digitally connected in their car, the market for listening to streaming and radio is shrinking. “Those equities will be worth zero in the next downturn,” he said.

Not all his bets have paid off. Rivian Automotive Inc. has been the worst performer among his holdings as inflation, labor and supply chain issues dented the electric-vehicle maker’s performance.

He remains optimistic Nvidia will make more advances in 2024, as demand is bigger than supply and new chip architecture is coming. 

“We try to own these companies for many decades and let compounding magic to do its job.”

This article was provided by Bloomberg News.