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Multi-Cap Growth
Quarterly Commentary as of September 30, 2008 |
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The Munder Multi-Cap Growth Fund has an inception date of July 1, 2008. The Fund's performance lagged behind its Russell 3000® benchmark for the quarter. In fact, the multi-cap growth discipline used in the investment process for the Fund experienced its most difficult quarter in more than five years. During the quarter, the market winners were stocks with slower earnings growth, lower price/earnings ratios and higher yields. In contrast, the Fund's focus on stocks with strong price and earnings momentum typically leads to stocks with higher earnings growth, somewhat higher price/earnings ratios and lower yields. These characteristics were not rewarded during the quarter. Instead, they had a significant negative impact on the Fund's relative performance. The sectors that had the greatest negative impact on the Fund's relative return included energy, industrials and materials. Commodity exposure was the common theme across these sectors, amidst growing concerns about the possibility of a global recession and the pressure that this might put on the demand component of companies' business models.
The consumer discretionary sector of the Fund had the least negative impact on relative returns. The sector's performance was helped by exposure to The Buckle, Inc. (1.4% of the Fund), a Midwestern retailer that focuses on teens and denim. The company' stock was up over 22% during the quarter, bucking the trend of most of the struggling fashion industry.
In contrast, the energy, industrials and materials sectors were the largest detractors from relative performance. The overweight of the energy sector was responsible for most of the negative impact of that sector. While most of the Fund's energy holdings met or exceeded earnings expectations, they performed poorly due to the decline in energy prices during the quarter and the global financial panic. The lagging performance of the materials and industrial sectors was due to a number of the same issues. Many of the companies in these sectors are involved in mining and construction activity, and have therefore been hurt by investors' increasing focus on the possibility of a global slowdown or recession as a result of the seizing up of the credit markets.
The multi-cap growth style emphasizes faster growing companies whose stocks are experiencing price momentum. These characteristics have historically boosted relative performance during times when investors are focusing on the fundamentals of investing. When investors are facing uncertainty about the direction of the economy and/or the Federal Reserve is in either an aggressive easing or tightening phase, the style has a higher probability of short-term underperformance as market leadership shifts to lower quality stocks with weaker fundamentals.
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Past performance does not guarantee future results.
An investor should consider the Fund's investment objectives, risks, and charges and expenses carefully before sending money. This and other important information about the investment company can be found in the Fund's prospectus. To obtain a prospectus, please click here. Please read the prospectus carefully before investing.
RISKS
Equity securities (stocks) are more volatile and carry more risk, but generally have provided greater return potential, than investments in certain other securities, like high-grade fixed income securities. Large-cap stocks generally have less volatility than smaller-cap and certain specialty securities, such as technology investments. Smaller and medium-sized company stocks are more volatile and less liquid than larger more established company securities. This Fund may invest up to 25% of its assets in foreign securities, which involve additional risks due to currency fluctuations, economic and political conditions, and differences in financial reporting standards.
Fund holdings mentioned in the manager commentary are as of 9/30/08. The portfolio holding information provided should not be considered as a recommendation to purchase or sell a particular security. There is no assurance that the securities mentioned remain in the Fund's portfolio or that securities sold have not been repurchased.
The statements and opinions expressed are those of the author(s) and do not necessarily represent the views of Munder Capital Management as a firm or the Munder Funds. While the information and statistical data contained in this material are based on sources believed to be reliable, it is current as of the time made and is subject to change without notice. Further, the information presented is general in nature and is not intended to provide personal investment advice or as an endorsement of any specific investment. The information does not take into account the specific investment objectives, financial situation and particular needs of any specific person who may receive it.
Munder Funds distributed by Funds Distributor, LLC.
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Michael P. Gura, CFA
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| Senior Portfolio Manager |
| BBA in Finance from Walsh College |
| MS in Finance with Distinction from Walsh College |
| Started with Comerica Bank in 1986. Joined Munder Capital in 1995 as a result of the merger with Comerica and its investment subsidiaries. |
| Years of Experience:20 |
| Focus:Member of the portfolio management teams managing Munder Capital's Large-Capitalization Growth and Multi-Capitalization Growth investment disciplines and their associated mutual funds as well as the Large-Cap Growth and Multi-Cap Growth segments of the Munder Asset Allocation Fund - Balanced. Also manages Munder Capital’s Healthcare equity discipline, including the Munder Healthcare Fund. |
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Thomas P. Kenny, CFA
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| Senior Portfolio Manager |
| BS (Cum Laude) from the University of Detroit |
| MBA from the University of Detroit-Mercy |
| Started with Comerica Bank in 1989. Joined Munder Capital Management in 1995 as a result of Munder's merger with Comerica and its investment subsidiaries. |
| Years of Experience:15 |
| Focus:Senior Portfolio Manager and co-manager of Munder Capital's Large-Capitalization Growth and Multi-Capitalization Growth investment disciplines and their associated mutual funds as well as the Large-Cap Growth and Multi-Cap Growth segments of the Munder Asset Allocation Fund - Balanced. Also is the Chairman of Munder Capital’s Pricing Committee. |
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| Munder Funds distributed by Funds Distributor, LLC. |
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