Monetta FundAs of March 31, 2020
Monetta Fund Facts
Inception Date: 5/6/1986
Fund Assets: $50.7 million
Expense Ratio: 1.41%
Number of Holdings: 37
Turnover (as of 12/31/19): 61.76% (1 year trailing)
Weighted Average Market Cap: $365.7B
Average Price/Earnings Ratio (as of 12/31/19): 27.3
Portfolio Risk Metrics
(Versus S&P 500® Index)
Top Equity Holdings (%)
|Security Description||% of Net Assets|
|Alphabet, Inc. - CL C||6.89%|
|MasterCard, Inc. - CL A||6.68%|
|Visa, Inc. - CL A||4.77%|
|Goldman Sachs Group, Inc.||3.05%|
|Walt Disney Co.||2.86%|
|Total % of Top Holdings||49.74%|
Monetta Fund Overview
The Monetta Fund seeks long-term capital growth. It pursues this objective by employing a bottom-up stock selection process that includes technical and fundamental analysis to identify strong management teams with a record of delivering higher revenue and earnings growth. The investment team focuses on companies that tend to exceed analysts’ forecasts and raise revenue/earnings guidance. The team controls risk through sector and company diversification with an emphasis on large-capitalization growth companies.
Our investment philosophy is based on a belief that long-term outperformance can be achieved by investing in large-cap growth companies that can exceed growth expectations over the next three to five years. Our motto is “buy high and sell higher.” We apply an investment philosophy inspired by well-known investors, including:
• Warren Buffett: “Best returns are achieved by companies that have been producing the same product or service for several years.” (1) The Monetta Fund emphasizes high-quality growth companies with a competitive edge.
• Peter Lynch: “Never invest in any idea you can’t illustrate with a crayon…invest in companies you understand.” (2) Our Fund tends to have a bias to invest in quality, household names with proven/experienced management teams and strong growth prospects.
• James O’Shaughnessy: “Market-leading firms are considerably less volatile than the market as a whole…Relative strength is a much better indicator of a company prospects than factors such as earnings growth rates.” (3) The Monetta Fund seeks companies with improving relative strength relative to its sector and overall market.
Stock Selection Process
Idea generation begins with technical analysis using external and internal screens that look at price momentum, money flows and relative strength to the market. To further refine our search, we evaluate company fundamentals such as:
• Competitive dynamics
• Management’s track record and ability to execute a growth strategy
• Balance sheet strength
• Positive cash flow
• Quarterly earnings trends that exceed expectations
• Higher company guidance
• Dividend growth opportunities
Portfolio Construction and Sell Discipline
We seek to construct a portfolio of 30-45 positions consisting of companies with market capitalization typically greater than $10 billion. The average security weighting is typically around 2% of the portfolio at the time of purchase. We are generally quick to sell a stock if management lowers guidance or our investment thesis changes.
Sector Weightings %
Monetta Financial Services, Inc. | 1776-A S. Naperville Road, Suite 100, Wheaton, IL 60189 | Phone: 630-462-9800 | Email: email@example.com
Please read the Prospectus carefully before you invest. It contains more complete information about the Monetta Funds, including risks specific to each fund, fees and expenses. A free, hard-copy of the prospectus can be obtained by calling 1-800-241-9772.
(1) Hagstrom, Robert G. The Warren Buffet Way: Third Edition. John Wiley, 2014, p. 78.
(2) Lynch, Peter, and John Rothchild. Beating the Street: a Special Edition for Worth Subscribers. Simon & Schuster, 1994, p. 27, 303.
(3) O’Shaughnessy, James P. What Works on Wall Street: the Classic Guide to the Best-Performing Investment Strategies of All Time. McGraw Hill, 2012, p. 192, 238.
Portfolio holdings and composition are subject to change at any time and are not a recommendation to buy or sell any securities.
Mutual fund investing involves risk. Principal loss is possible. The Funds may make short-term investments, without limitation, for defensive purposes, which investments may provide lower returns than other types of investments. The portion of the Monetta Core Growth Fund that invests in underlying ETF’s that track the Index will be subject to certain risks which are unique to tracking the Index. By investing in ETF’s, you will indirectly bear your share of any fees and expenses charged by the underlying funds, in addition to indirectly bearing the principal risks of the funds. Growth-oriented funds may under-perform when growth stocks are out of favor. Please refer to the prospectus for further details. While the funds are no-load, management and other expenses still apply.
Diversification does not assure a profit nor protect against loss in a declining market.
Standard and Poor’s 500® Index is a capitalization-weighted index of 500 stocks. This unmanaged index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The index was developed with a base level of 10 for the 1941-43 base period. You cannot invest directly in an index.
Alpha compares risk-adjusted performance relative to an index. Positive alpha means outperformance on a risk-adjusted basis. Beta measures the volatility of a security or portfolio relative to an index. Less than one means lower volatility than the index; more than one means greater volatility. R-squared (R2) measures the relationship between portfolio and index performance on a scale of 0.00 (0%) to 1.00 (100%). A higher R2 indicates more of the portfolio’s performance is affected by market movements and vice versa. Price-to-Earnings (P/E) is calculated by dividing the current price of a stock by the company’s trailing 12 months’ earnings per share.
The Fund’s website contains links to third-party websites. The Fund and the advisor are not affiliated with, sponsored by, or endorsed by any 3rd party website. Monetta Funds are not responsible for, nor can guarantee the accuracy of, information on 3rd party websites.
Monetta Financial Services, Inc. is the adviser to the Monetta Funds. The Monetta Funds are distributed by Quasar Distributors, LLC.