Stocks for the Long Run
Our Founder and CIO, Mark Ellis, recently highlighted Stocks for the Long Run by Jeremy Siegel in an article on the Nutshell Growth Fund. The book offers valuable insights into the history of the stock market and the power of long-term investing. Here are some of our key takeaways...
Why you need more than just Quality & Growth.
For decades, investors have debated the best way to capture long-term equity returns. Jeremy Siegel’s Stocks for the Long Run makes a compelling case: equities remain the most powerful wealth-generating asset class, provided investors stay disciplined. With our Nutshell Growth Fund, we take this philosophy a step further by applying a systematic, multi-factor approach to Quality & Growth investing. It avoids the common pitfalls of chasing momentum, overpaying for future earnings, or riding speculative stocks up and then all the way back down. Here’s how we do it differently.
The long-term power of Growth Stocks, with discipline.
Siegel’s research confirms what many investors instinctively know: stocks outperform other asset classes over long periods, and companies that can compound earnings deliver exceptional results. However, history also shows that investors frequently get caught in the euphoria of high-growth stories, often paying too much and suffering when valuations inevitably contract.
Nutshell’s approach is to back the companies that have already won and thus avoid chasing hyped-up, unprofitable “story stocks” with uncertain futures. Instead, we focus on companies with a proven ability to generate sustainable earnings and cash flows. By systematically applying factors like quality, earnings growth, relative valuation, and momentum, we ensure we’re not just buying growth, but profitable growth at a reasonable price. This approach differentiates us as one of the best-performing growth funds available to both institutional and retail investors.
Valuation matters, avoiding the pitfalls of overpaying.
One of Siegel’s most critical findings is that even the greatest growth companies can be poor investments if purchased at excessive valuations. The market has seen this time and again. Investors who bought Cisco at >200x earnings in 2000 are still waiting to break even (capital returns), as shown in the chart below.
Source: Bloomberg, 09/03/2025 (Comments from Nutshell)
This is why Nutshell integrates a relative valuation discipline into our process. While some growth funds are content to “let winners run” regardless of valuation, we systematically rebalance every two weeks, taking profits when stocks become too expensive. This disciplined rebalancing aligns with institutional equity fund strategies designed to maximize long-term returns while mitigating downside risk. We believe that growth investing isn’t just about finding great companies; it’s about buying them at the right price and knowing when to trim positions. This is what allows us to compound returns over time without being exposed to excessive drawdown.
The current sell-off and geopolitical uncertainty.
We’re reminded of the common selloffs in markets through this chart of the S&P 500. There have been 26 instances where the market has sold off over 10% from a peak shown by the dots below. As we write, the S&P is nearing this territory again and the Nasdaq has breached the 10% level – used to define a correction.
Source: Bloomberg, 07/03/25
Stocks for the Long Run reinforces why equities remain the best tool for wealth creation, as long as you have discipline. Nutshell Growth Fund applies a rigorous, systematic approach that avoids common traps like overpaying for hype stocks, failing to take profits, or exposing investors to unnecessary volatility. With our focus on quality, growth, valuation, and momentum, combined with disciplined rebalancing, our strategy offers a high-growth investment fund alternative that differs from most in the IA Global Sector.
For UK investors looking for the best ISA growth funds in 2025 or SIPP investment funds with high returns, our approach offers a compelling solution.
Nutshell Growth Fund 3 year performance.
According to FE Analytics, the Fund is ranked 6/483 over 3 years in the IA Global Sector, placing it in the Top 2%.
Source: FE fundinfo, 11/03/2025
Testimonials from the Industry.
The Nutshell Growth Fund has a 5-Star Overall Morningstar RatingTM.
Last year, the Fund was also awarded Elite RADAR status by Fund Calibre. This is how our fund is perceived by them:
‘This is an innovative and original fund. Mark has come into fund management from a slightly unconventional route, having previously had a successful career as a trader. However, we view this as a positive and we like the new ideas Mark has brought. What makes this fund particularly interesting is its rare combination of pragmatism, given Mark’s trading background and academic rigour. The quant process is grounded in logical academic reasoning and the fund has delivered thus far. We like the fund’s nimbleness and its ability to quickly reposition. It is firmly on our radar as an exciting future prospect.’
By Chris Beament, Head of Sales at Nutshell Asset Management
March 2025