3 Fascinating “Themed” Mutual Funds to Buy Now

1) American Beacon Ark Transformational Innovation Fund (ADNPX)

You can’t have a collection of thematic mutual funds without including 2020’s most talked-about investment manager. I’m speaking about Catherine Wood, the chief executive officer and chief investment officer of New York-based Ark Investment Management. 

Wood created a name for herself by investing in innovative disruptors such as Tesla (NASDAQ:TSLA), which she believes is headed to the moon. That’s brought in a ton of money for her company’s ETFs. 

However, the American Beacon Ark Transformational Fund, which Ark acts as sub-advisor, has a reasonably tame $723.4 million in assets under management. That compares to $10.6 billion for its Ark Innovation ETF (NYSEARCA:ARKK). 

No surprise, the fund’s mandate is to find and invest in disruptive innovation. Not surprisingly, the investor class of shares has Tesla as its number one holding at a weighting of 11%. That’s more than 400 percentage points higher than InVitae (NYSE:NVTA), the fund’s second-largest holding at 7.2%. 

The fund’s top 10 holdings account for 51% of its assets, with the remaining 38 stocks accounting for the remainder. 

Think of it as a “best ideas” fund.     

2) Jacob Internet Fund (JAMFX)

Mutual fund thematic investing doesn’t seem to be as industry or sector-specific as ETF investing. No matter. There’s still plenty to choose from. 

The Jacob Internet Fund has been around since December 1999, launched right at the height of the dot.com boom and subsequent crash. It seeks to invest in companies that use the internet to grow their businesses. 

It isn’t cheap, with an annual management expense ratio of 2.32%. However, when you can deliver a 10-year annualized total return of 18.3%, fees don’t matter nearly as much. 

As for the number of holdings, it has 33 stocks in the fund, it turns 100% of the portfolio approximately every two years, and its top 10 holdings account for 54% of its $75.6 million in total net assets. 

The top three holdings: Digital Turbine (NASDAQ:APPS) at a weighting of 9.4%, Twilio (NYSE:TWLO) at 8.2%, and Square (NYSE:SQ) at 6.6%. I’ve recommended both Twilio and Square in 2020. 

If you’re thinking of investing in mutual funds to buy like JAMFX, the minimum is $2,500. 

3) Gabelli Pet Parents Fund (PETZX)

As a major pet owner over the years, I would be remiss if I didn’t include this themed fund from Mario Gabelli and company. 

The fund got its start a little over two years ago in June 2018. Assets under management are a minuscule $3.1 million.

The fund’s investment strategy invests at least 80% of its assets in the pet industry. 

“The pet industry includes companies that offer services and products for pets and pet owners (“Pet Parents”),” states the fund’s website. 

“Such companies will generally derive at least 50% of their revenues or profits from, or will devote at least 50% of their assets to the following sectors: manufacturers and distributors of pet food, pet supplies, veterinary pharmaceuticals, veterinary wellness, veterinary and other pet services, pet equipment, pet toys, and products and services that support Pet Parents regarding their pet activities.”

One of the top three holdings is Chewy (NYSE:CHWY), the online pet store that went public in June 2019 after being spun-off by PetSmart. Thanks to the pandemic, Chewy’s stock is up more than 119% in 2020. 

How’s the rest of the portfolio done? Very well, thank you, up almost 36% year to date through Oct. 19. 

Pets will continue to be a profitable investment space for investors willing to hold for the long haul. 

Full story at Investorplace.com

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