His $3.1 billion James Balanced: Golden Rainbow Fund is up 2.8 percent this year, beating 73 percent of its peers, data compiled by Bloomberg show.
Technology, the most loved industry among funds in the survey by Citigroup, suffered some of the biggest losses. The Nasdaq Internet Index, which rallied 494 percent over the five years through March, has since dropped 19 percent as concerns grew that valuations as high as 822 times estimated earnings for stocks such as Amazon and Twitter Inc. aren’t justified.
The 30 S&P 500 stocks most favored by analysts two months ago have fallen 0.4 percent while those with the lowest ratings have climbed 5.3 percent, data compiled by Bloomberg show. AGL Resources Inc., a natural gas distributor based in Atlanta that was ranked the lowest, has advanced 11 percent.
Most Shorted
Shares targeted by bears are rising. Mining equipment maker Joy Global Inc. and phone service provider Frontier Communications Corp. were among eight companies that had short interest exceeding 20 percent of their shares available for trading at the end of February. Their stocks have since increased an average 2.9 percent.
The 50 companies least favored by institutional investors, such as Exxon Mobil Corp. and Windstream Holdings Inc., have gained 4.9 percent since March. The most loved, such as GameStop Corp. and VeriSign Inc., are down 0.2 percent.
“Once it’s a crowded trade and everyone is in the same consensus, that’s kind of group thinking that there is nowhere to go but down,” Craig Hodges, the Dallas-based manager of the $1.2 billion Hodges Small Cap Fund, said by phone. The fund has beaten 99 percent of its peers over the past three years. “We try to look at contrarian areas.”