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Mutual fund Bridgeway Aggressive Investor, like many other money managers, celebrated triple-digit gains at the height of the technology boom in 1999. But while its rivals started to give back their profits the following year, Bridgeway still ended 2000 in the black.
Founder and CEO John Montgomery credits the fund’s focus on risk control in addition to return on investment. As much as 30%, on a purchase basis, of Bridgeway was in tech in ’99, Montgomery told Cramer Friday. But early the next year the fund began to scale back as a way to control risk.
Bridgeway [BRAGX
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] uses quantitative models to decide its trades, and Montgomery has full faith in them. “It takes all the emotion out of the equation,” he said. So even though he personally might think Research in Motion [RIMM
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] looks expensive, he trusts the discipline of the quants to make that decision.
The strategy seems to be working. Bridgeway has earned an annual average return of over 18% over the last five years.
“This is one you should consider,” Cramer said.
For more on Cramer’s handpicked mutual funds, check out his new book, Stay Mad for Life.
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