- Julianne McHugh, lead manager of BNY Mellon Large Cap Securities (DREVX), focuses on future market leaders rather than blue-chip stars of the past.
- She looks for forward-looking blue chips, serial compounders, long-term growers, first-movers, stable and resilient companies, and innovators.
- McHugh’s strategy has led to the fund outperforming the S&P 500 in the past one-, three-, five-, and 10-year periods.
Julianne McHugh, manager of BNY Mellon Large Cap Securities, bets on future market leaders, focusing on innovative and resilient companies. Her strategy has led to consistent outperformance against the S&P 500.
Investing in the Future
McHugh’s investment strategy is to focus on companies that are not just current market leaders, but have the potential to dominate in the future. She looks for “forward-looking blue chips,” “serial compounders,” “long-term growers,” “first-movers,” “stable and resilient” companies, and “innovative” businesses. These companies often have a long growth runway ahead and are on the forefront of the next big thing.
High Conviction Investments
McHugh’s portfolio is concentrated, consisting of about 50 stocks. She only adds quality businesses with strong management teams and a focus on value creation. These companies have strong products with competitive positioning that drives demand and market share. Any stock that makes it into BNY Mellon Large Cap Securities is a “high conviction” name.
Driving Future Growth
Many of the stocks McHugh invests in have an innovative product introduction that can drive growth going forward. For example, Eli Lilly, a top 10 holding in BNY Mellon Large Cap Securities, is driving growth with its breakthrough drugs Mounjaro and Zepbound. These drugs accounted for 26% of Eli Lilly’s $8.8 billion in revenue in the first quarter.
Investing in Tech Leaders
Nvidia, the fund’s No. 1 holding at the end of March, is another example of a company McHugh likes. She believes Nvidia has a clear first-mover advantage in AI and that it will be tough for other chipmakers to compete. Amazon is another stock she likes, citing its competitive, distribution and cost advantages from its e-commerce business and its Amazon Web Services (AWS) cloud-computing business.
Opportunities in Industrials
McHugh also sees opportunities in industrials. She likes Ingersoll Rand, an industrial company that makes vital products for energy efficiency. She is also bullish on JPMorgan Chase, citing the stellar leadership of CEO Jamie Dimon.
Conclusion
McHugh’s investment strategy of focusing on future market leaders and high conviction investments has led to consistent outperformance against the S&P 500. Her advice to investors is to “expect the unexpected.”
