A fund manager who's beaten 99% of her peers over the past 5 years told us why she remains bullish on growth stocks despite the recent sell-off — and listed her 3 favorite stocks for continued gains in the decade to come

  • Brooke de Boutray has outperformed virtually all of her peers over the last five years. The first half of 2020 was no different. 
  • She told us about her outlook on the market amid its most volatile period since March, and pinpointed three stocks she's most bullish on for gains over the decade to come.
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It was a banner first half of the year for Brooke de Boutray.

The Zevenbergen Genea Fund (ZVGIX) she co-manages with four colleagues was the seventh-best performing US-stock fund in the first half of 2020, according to The Wall Street Journal, during a time of high uncertainty and massive market shifts.

Then again, it's not as if her success was a surprise. 

De Boutray, who is one of the original owners of Zevenbergen Capital Investments, is an elite portfolio manager. She has outperformed nearly all of her peers over the last five years according to Bloomberg data, and her fund is up 120% in the last 12 months. 

On the heels of the first period of high market volatility — and the first sell-off in tech and growth stocks — since March, we asked de Boutray about her outlook going forward, and what stocks she's most bullish on.

Despite the recent exit from tech and the continued calls from large Wall Street firms like Morgan Stanley of a coming shift into cyclical stocks as the economy begins to recover, de Boutray said she remains broadly upbeat about the growth prospects of tech stocks. 

While she said cyclicals may indeed see gains in the near-to-mid-term, she said the mammoth shift into e-commerce caused by the pandemic is a trend that will continue to drive growth. 

"Once a company does a digital transformation, I don't think they're going to turn back the clock," she told Business Insider by phone on Monday.

She continued, "And I think that many of these new ways that the consumer has adopted such as e-commerce adoption by demographics that weren't necessarily using e-commerce, things of this sort have become more frictionless, and I think that will continue." 

She also cited relaxed monetary policy from central banks as being advantageous for these types of stocks.

"We're in a period of low inflation, low interest rates, and with low interest rates there are not a lot of alternatives," she said. "I think the difference in this market, coming out of a recession, is that growth stocks have outperformed more short plays and cyclicals. But I think the market is very efficient and is recognizing the growth in these companies."

In terms of sectors she's looking at most within growth, de Boutray listed electric vehicles, real estate, and fitness. Further, she told us her favorite stock in each of these sectors that she believes will deliver continued gains over the decade to come.

3 stocks for continued gains in the decade to come

In electric vehicles, de Boutray said she's a fan of Tesla (TSLA) because she thinks the company is peerless in the space. Factors like changing attitudes and forthcoming regulation in the traditional auto industry also support her view.

"I think that they have demonstrated their ability to be far ahead of competition. You know in the early days, I think people questioned whether electric vehicles would even be a viable mode of transport to the mass market. And now it's not a question of if, but when," she said.

She added: "And it's not just because the electric vehicle is becoming more affordable because of the technological advancements that a company like Tesla have done, but I think it's also because people are concerned about climate change and doing what's right for the environment as well. And you've got things like the state of California saying we're going to ban all combustion-engine vehicles by 2035."

In real estate, de Boutray said she's most bullish on Zillow (Z) because of how they have disrupted the sector.

"Rich Barton is the founder of Expedia as well as Zillow, and he's very entrepreneurial which I think is a positive in a market such as that," she said. "It's over a trillion-dollar industry, and they're trying to digitize the whole process of real estate transactions."

Lastly, in fitness, de Boutray listed Peloton (PTON) as her top pick, saying it has strong long-term growth potential despite also being a short-term beneficiary of the lockdown measures. 

"We're very excited about the whole concept of connected fitness, and a company that comes top of mind would be Peloton. Obviously we've pulled forward a lot of demand because of COVID and people weren't able to go to the gym, so they did a tremendous amount of sales," de Boutray said. 

She added: "But I think that people recognize how easy it is, A; the value proposition, B; and C, that people are more concerned about health and wellness, particularly coming out of COVID. And so Peloton really is a company that is fostering community … and I just think that's a platform that could be very valuable going forward."

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