(Bloomberg) -- You can beat the crowd without the Magnificent Seven. That’s the view of a pair of pint-sized French funds, which have outclassed 99% of their peers this year. 

The Europe-focused €400 million Prevoir Gestion Actions fund has returned 17% year-to-date, while the €50 million Prevoir Pangea, which invests globally, is up 25%. Both funds do have some exposure to Big Tech, including Nvidia Corp. and ASML Holding NV, but say smaller names such as Super Micro Computer Inc. which rose 250% last year, burnished their returns. 

Now, the funds are foraying into companies outside the artificial intelligence frenzy, betting that market gains will encompass unglamorous sectors such as caterers, haulers and pharmacies. 

“We have always been underexposed to the Magnificent 7,” said Fares Hendi who jointly manages the two buy-and-hold equity funds with Louis Puga. “At the moment in financial media you only hear about the Magnificent Seven, about tech, but it’s not true, there are loads of companies doing better.” 

He named restaurant groups Chipotle Mexican Grill Inc. and Wingstop Inc. as companies that have risen more than Bloomberg’s index of Magnificent Seven stocks in the past year. 


Recently, the funds bought shares in Builders Firstsource Inc., United Rentals Inc. and trucking group Saia Inc — US companies valued at less than $50 billion. They also bought into $18 billion energy drinks firm Celsius Holdings Inc. In Europe, the Prevoir Gestion fund bought into building materials group CRH Plc and online drugstore chain RedCare Pharmacy.

These new positions, funded notably by cutting back on Apple Inc., STMicroelectronics NV, represent a bet that profit growth will not be a monopoly of the biggest stocks. 

Puga used his client letter in March to praise Lotus Bakeries NV, a €7 billion Belgian firm which bakes the iconic speculoos cookies and has surged about 35% over the past 12 months. In December, he wrote to his investors about Italian luxury fashion firm Brunello Cucinelli, a €6 billion minnow, which has since added about 40%.  

The funds’ five-year track record is strong, surpassing 99% of peers for the Europe-focused portfolio and 89% for the global one, according to data compiled by Bloomberg. 

In expectation that recent equity gains will continue, the two funds currently hold no cash in their portfolios.

--With assistance from Michael Msika.

©2024 Bloomberg L.P.