A legendary stock-picker who’s been Wall Street’s top performer for years has gotten whacked to start 2022 as high-growth names have tanked

• Dennis Lynch, Morgan Stanley’s legendary stock-picker, has had a tough start to 2022.
• His biggest fund is down 24% year-to-date and has a percentile rank of zero compared to others in the same category.
• Top holdings include high-growth tech stocks, which have been battered in anticipation of a hawkish Fed.
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Funds managed by Dennis Lynch — Morgan Stanley Investment Management’s legendary stock-picker who’s been among Wall Street’s top performers for years — have been whacked to start 2022 as high-growth names have tanked.

The largest fund Lynch oversees, the Morgan Stanley Institutional Fund Class I Growth Portfolio, which invests primarily in established and emerging large-cap companies in the US, has been hit with a 24% year-to-date loss, ranking it in the 0 percentile among funds in the same category.

The losses didn’t begin in 2022, though, and the fund also has a trailing one-year percentile of 0 with losses of 27.3% for the 12 months ending on January 24. 

The fund has gained 23.2% the last three years and is ranked in the 65th percentile among its peers. The five-year performance shows gains of 23.5%, ranking the fund in the 96th percentile.

The fund was created in April 1991 and is still ranked in the top 10 among its US large-cap peers over the past three, five, and 10 years, according to Kiplinger.

Morgan Stanley Institutional Fund’s top holdings include Snowflake (7.37%), Shopify (6.76%), Cloudflare (6.37%), Roblox (5.47%), and DoorDash (4.73%). These kinds of high-growth tech stocks have been hammered recently as investors shift their portfolios in anticipation of tighter monetary policy. 

Lynch’s second-biggest fund, Morgan Stanley Investment Z Share US Advantage Fund (ticker MORAMFA) has lost 26.1% year-to-date, putting it in the first percentile among its peers. It is also in the first percentile on a one-year basis, with losses of about 30% 

The fund, created in December 2005, has gained 13.78% in the last three years and 14.83% in five years, putting it in the 29th and 71st percentiles, respectively. Its top holdings are also mostly beaten down tech names including Shopify (6.78%), Snowflake (6.44%), Uber (5.49%), Roblox (5.405), and Veeva Systems (4.82%).

Lynch, the number one large-cap fund manager in the US in 2020, is head of growth investing at Morgan Stanley Investment Management where he oversees more than $130 billion in assets across a range of equity funds.

The legendary stock picker joined the bank in 1998 and has been the top-performing large-cap fund manager on Wall Street for years. 

A spokesperson for the bank did not respond to a request for comment on the performance of the funds.