By David Snowball

2020 seems to have restored our belief in wizards, wands, fairy dust, and the powers of the Great Wizard Jerome (Powell). It is a year in which more funds and ETFs posted 100%-plus returns than any I know of. Setting aside leveraged, double-leveraged, triple-leveraged, and inverse-leveraged funds (please set them aside!), 36 funds posted triple-digit returns in 2020.

Invesco Solar ETF	234%
Invesco WilderHill Clean Energy ETF	205
GMO Special Opportunities VI	194
First Trust NASDAQ Clean Edge Green Energy Index Fund	184
ARK Genomic Revolution ETF	181
ARK Next Generation Internet	157
ARK Innovation ETF	153
Morgan Stanley Inst Inception	151
Baron Partners	149
American Beacon ARK Transformative Innovation	148
Invesco Global Clean Energy ETF	145
Zevenbergen Genea	145
Morgan Stanley Inst Discovery	143
iShares Global Clean Energy ETF	142
ALPS Clean Energy ETF	140
KraneShares MSCI China Environment ETF	138
SPDR Kensho Clean Power ETF	138
Global X Lithium & Battery Tech ETF	128
Baillie Gifford US Equity Growth	125
Zevenbergen Growth	125
Amplify Online Retail ETF	124
Jacob Internet	123
Baron Focused Growth	122
Virtus Zevenbergen Innovative	119
Morgan Stanley Insight	117
Morgan Stanley Inst Growth	116
Shelton Green Alpha	114
ProShares Online Retail ETF	112
Transamerica Capital Growth	112
WisdomTree Cloud Computing ETF	110
Morgan Stanley Global Endurance	110
Upright Growth	109
O’Shares Global Internet Giants ETF	108
ARK Fintech Innovation ETF	108
Renaissance IPO ETF	108
Baillie Gifford Long Term Global	102

This list is long, but not terribly diverse. Read the prospectuses and you’ll come across the same words over and over: focused, concentrated, disruptive, innovative, disruptive innovation, next-gen, thematic, pure-play, sustainable.

I’m passionate about the “sustainable” part; really, our children’s and grandchildren’s world hangs in the balance. If we’d acted when we first discovered the role of human activity on disrupting the global climate – nearly 50 years ago – modest and unremarkable changes (from stepping up the replacement of Depression-era power grids to avoiding our embrace of 74oo pound urban assault vehicles) would have led us to a far less threatening future. But if the best time to act was 50 years ago, the second-best is surely “now.”

That said, many of the Titans of ’20 show the same performance chart, here illustrated by the Invesco WilderHill Clean Energy ETF.

This is a fund that had lost money in six of the preceding nine years. An investment made in the fund in February of 2011 was still underwater almost 10 years later. And then, without noticeably economic and government tailwinds, the returns exploded. An investment made on March 31, 2020, quadrupled in value by year’s end.

For many funds, 2020 will have been the high point of their existence. By way of illustration, the table below identifies the mutual funds which returned 30% or more last year after having trailed 66-100% of their peers in 2019, 2018 and 2017.

	Morningstar Category	2020 Return	2020 Rank	2019 Rank	2018 Rank	2017 Rank	2016 Rank	Morningstar Risk
Upright Growth	Technology	108.7	3	99	100	100	83	High
US Global Investors World Precious Minerals	Equity Precious Metals	70.6	1	93	94	97	7	Above Average
Tanaka Growth	Mid-Cap Growth	50.9	21	99	100	100	95	High
Royce Smaller-Companies Growth	Small Growth	49.3	27	75	78	68	56	Above Average
Matthews Asia Small Companies	Pacific/Asia ex-Japan Stk	43.7	17	73	79	75	80	Average
Ashmore Emerging Markets Small Cap	Diversified Emerging Mkts	43.4	4	75	93	74	44	High
Permanent Portfolio Aggressive	Large Growth	38.0	36	84	99	88	1	High
Quantified Market Leaders	Mid-Cap Growth	37.9	38	90	89	91	2	Average
WesMark Small Company Growth	Small Growth	36.6	49	87	92	90	43	Below Average
Timothy Plan Aggressive Growth	Mid-Cap Growth	36.1	40	85	85	84	93	Average
Sit Small Cap Growth	Mid-Cap Growth	35.9	40	76	81	94	66	Above Average
Fidelity Capital Appreciation	Large Growth	33.8	49	70	77	74	50	Average
SEI Extended Market Index	Mid-Cap Growth	32.9	53	83	74	88	3	Above Average
Rydex S&P MidCap 400 Pure Grow	Mid-Cap Growth	30.7	61	99	91	86	71	Above Average
BNY Mellon Small/Mid Cap Multi-Strategy	Mid-Cap Growth	30.0	64	81	82	76	78	Above Average

The members of the Centennial Club – the funds that posted triple-digit gains in 2020 – show the same pattern of inconsistent excellence and high volatility, if to a lesser degree than the funds above.

	Morningstar Category	2020 Return	2020 Rank	2019 Rank	2018 Rank	2017 Rank	2016 Rank	M-star Risk
GMO Special Opportunities VI	70% to 85% Equity	194%	1	92	90	1	21	High
Morgan Stanley Inst Inception	Small Growth	151	1	11	17	46	96	High
Baron Partners	Mid Growth	149	1	1	18	9	63	High
American Beacon ARK Transfmt I	Mid Growth	148	1	74	56	—	—	High
Zevenbergen Genea	Large Growth	145	1	79	1	1	81	High
Morgan Stanley Inst Discovery	Mid Growth	143	2	8	1	1	99	High
Baillie Gifford US Equity Growth	Large Growth	125	1	73	2	—	—	High
Zevenbergen Growth	Large Growth	125	1	9	4	14	91	High
Jacob Internet	Technology	123	1	93	26	86	41	High
Baron Focused Growth	Mid Growth	122	3	71	5	31	87	High
Virtus Zevenbergen Innovative	Large Growth	119	1	15	2	14	89	High
Morgan Stanley Insight	Large Growth	117	1	38	1	1	94	High
Morgan Stanley Inst Growth	Large Growth	116	2	97	3	2	87	High
Shelton Green Alpha	Mid-Cap Growth	114	3	3	96	14	95	High
Transamerica Capital Growth	Large Growth	112	2	98	3	2	92	High
Morgan Stanley Global Endurance	World Large Stock	110	1	19	—	—	—	—
Upright Growth	Technology	109	3	99	100	100	83	High
Baillie Gifford Long Term Global	World Large Stock	102	1	7	3	1	96	High

Bottom line

Without any question, some of these are very fine funds. Likewise ETFs. But you cannot now buy the fund’s 2020 returns, so you should not use them to justify 2021’s purchases.