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3 ASX shares that helped this fund manager smash the market

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The OC Micro-Cap Fund was a strong performer during the final quarter of 2020.

According to its most recent quarterly update, the fund manager delivered a 17.5% return for investors during the three months ended 31 December.

This stretched its 12-month return to an impressive 43.1%, which is an outperformance of 16% versus the benchmark S&P/ASX Emerging Companies Accumulation Index.

What has been driving the OC Micro-Cap Fund’s strong returns?

There were three key contributors to the fund’s strong performance during the final quarter of 2020.

The first was the Galaxy Resources Limited (ASX: GXY) share price, which recorded a 98.5% gain over the period.

OC notes that the lithium miner was a big winner after the “market came to grips with President-elect Biden’s ambitious ‘2050 net zero emissions’ target.”

It commented: “As a key component in batteries that power electric vehicles, lithium will play a critical role in the achievement of this objective. GXY raised additional capital during the quarter to advance its flagship Sal de Vida project and is now well capitalised to achieve its first production later in 2022.”

It believes Galaxy will continue to benefit as the global economy looks toward sustainable avenues for growth.

What else underpinned OC’s strong performance?

Another big winner for OC was the Telix Pharmaceuticals Ltd (ASX: TLX) share price. The Melbourne-based biopharmaceutical company’s shares rocketed a massive 127.7% during the quarter following a series of positive updates.

One of those was a strategic partnership with China Grand Pharmaceutical and Healthcare Holdings (CGP) for the greater China market worth upwards of US$225 million in regulatory and commercial milestones payments.

OC commented: “We see CGP’s investment as a vote of confidence in TLX’s pipeline by a company with experience in nuclear medicine (CGP acquired ASX listed oncology and nuclear medicine business Sirtex Medical in 2018).”

Although OC has trimmed its holding slightly, it remains positive on the company’s long term prospects.

It explained: “TLX has an impressive late-stage portfolio with numerous catalysts in 2021 including regulatory approval and commercialisation of TLX591-CDx (prostate cancer imaging) which has revenue potential in the hundreds of millions of dollars and a tier-one US-based partner, Cardinal Health, ready to sell its product in the US. We have trimmed our holding into recent share price strength but remain excited about the outlook for this well managed company.”

Evolve charges higher

Finally, the Evolve Education Group Ltd (ASX: EVO) share price was another positive contributor to OC’s performance during the quarter.

The childcare company’s shares rose 70.2% during the period thanks largely to a solid operating update in October. That update demonstrated how the largely NZ-based company was emerging in excellent condition following its COVID-19 lockdowns.

OC remains positive on its prospects, noting that it believes “EVO is well positioned for the ongoing expansion of its Australian beachhead in 2021 and we remain holders of the stock.”

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Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited and TELIXPHARM DEF SET. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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