8/24/2011 3:10 PM ET|
The top time-tested mutual funds
Want to get the most for your nest egg? These funds are the best performers by category over the past one-, three-, five-, 10- and 20-year stretches.
Here are top mutual fund performers over the past one, three, five, 10 and 20 years, in 11 categories -- 10 stock-fund groups and one group for alternative investments -- along with a few suggestions on funds you should consider buying.
The lists consist of funds that require only modest initial investments and are available to all classes of customers.
Large-company stock funds
Growth funds dominate the list of leaders over the past 12 months, which is not surprising given how slowly the economy is growing.
Over longer periods, a few value-conscious managers, such as Donald Yacktman, stand out. With his son Stephen, Yacktman runs two eponymous top performers: Yacktman (YACKX) and Yacktman Focused (YAFFX).
Many of the category's top funds, including Yacktman's, hold relatively few stocks or make big sector bets. Of course, a focused strategy can backfire, as it has in 2011 for Fairholme (FAIRX), which is heavily invested in financial stocks.
Fidelity Contrafund (FCNTX) is a growth-oriented fund that's been deftly run by Will Danoff since 1990. Two funds that adhere to Islamic investing principles -- Amana Trust Growth (AMAGX) and Amana Trust Income (AMANX) -- benefited during the financial crisis by shunning ownership of companies that lend money.
- Large-company funds: See the 10 top performers over the past one-, three-, five-, 10- and 20-year periods at Kiplinger
Midsize-company stock funds
Midsize companies are in the market's sweet spot. They are small enough to be able to grow swiftly, yet they are less risky than small-company stocks.
The longer-term winners in this category have excelled in a variety of market climates.
Rick Aster, who has run the Meridian Growth (MERDX) fund since 1984, sniffs out fast-growing, high-quality companies and hangs on to them. Appleseed (APPLX) is a socially screened fund with a value bent and a sizable gold stake among its 20 holdings.
This category also includes funds, such as Fidelity Low-Priced Stock (FLPSX), that invest in companies of all sizes. This fund typically buys stocks priced at $35 a share or less. Joel Tillinghast, who has run it since its 1989 launch, holds nearly 900 stocks.
- Midsize-company funds: See the 10 top performers over the past one-, three-, five-, 10- and 20-year periods at Kiplinger
Small-company stock funds
This has been the strongest part of the U.S. market over the past year. Small-company stocks, particularly those of fast-growing companies, have been on a tear since the bear market ended in March 2009. The Russell 2000 Growth index was up 34% in 2009, 29% last year and 8.6% in the first half of 2011.
That not one of the top one-year performers appears on the list of three-year winners underscores the risk of investing in this volatile category of funds.
Intrepid Small Cap (ICMAX), which seeks value stocks, has been a consistent performer, but it recently had a change of managers. The T. Rowe Price Equity Income (PRFDX)and Baron Small Cap (BSCFX) funds have stellar long-term records -- each has returned an average of 8.4% a year over the past decade.
- Small-company funds: See the 10 top performers over the past one-, three-, five-, 10- and 20-year periods at Kiplinger
This hodgepodge category includes convertible-bond funds, balanced funds and others whose common denominator is that they are not fully invested in common stocks.
Among traditional balanced funds -- those that have about two-thirds of their assets in stocks and the rest in fixed-income securities -- two standout value-oriented choices are Dodge & Cox Stock (DODGX) and Oakmark Equity and Income (OAKBX).
The Vanguard Wellesley Income (VWINX) fund is the mirror image of typical balanced funds; it allocates two-thirds of its portfolio to bonds, and the rest is in stocks. The Permanent Portfolio (PRPFX) fund invests in, among other things, stocks, Treasurys, Swiss francs and gold.
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