Despite the sector comprising 11.3% of his Russell 3000 Growth benchmark index, Bauman (pictured) holds no stocks in the space.
That stance has been vindicated recently, following disappointing earnings reports from companies such as Best Buy, Target, Sears and Wal-Mart.
‘Many of the US consumer stocks have disappointed from a fundamental perspective,’ Bauman said.
‘Growth has been zero to negative in terms of revenues, and we have seen big disappointments from almost every big US brand company.’
Bauman supposed that shares in the sector had been both bid up by yield-chasing investors and over-rated by optimists on the US economy.
Of the weak updates from consumer groups, Bauman observed: ‘To me, what that signals is an economy that is still very soft. It is growing slightly, but it’s growing slightly at best.’
‘Some of these companies and some of these sectors are positioned for a full recovery that we have not witnessed,’ he warned.
In his own portfolio Bauman has instead emphasised firms such as Amgen, Comcast and Facebook. ‘These are not companies that need the economy.’
Over the past three years the fund has returned an annualised 16.7%, compared with 16.5% from the Russell 3000 Growth index and 13.4% from its average peer.