So far, so good: Top mutual funds of 2012
Some of the hot categories of the year to date include health care and emerging-market debt.
By Tom Taulli
This year has been a friendly one for mutual funds. Of course, that's thanks to a stock market in full bull mode, with the S&P 500 up a sizzling 15% through three quarters.
Some of the hottest categories to date have included large-growth stocks, health care, emerging-market bonds, global real estate and foreign small- to mid-growth stocks.
In looking for the best mutual funds for 2012 year to date, we included at least a couple requirements: the fund had to have at least $1 billion in assets and be actively managed.
Here are the funds that stood out:
Hartford Growth Opportunities
Category: Large Growth
Fund Return for 2012: 25.86%
Category Return for 2012: 15.11%
Assets Under Management: $2 billion
Large-cap companies are a magnet for investors looking for stability -- a trend that has tipped the scales in favor of the Hartford Growth Opportunities Fund (HGOAX).
Hartford Growth Opportunities takes a riskier growth approach, but has been rewarded by hot holdings like Amazon (AMZN), eBay (EBAY) and even LinkedIn (LNKD), which have seen respective growth of 47%, 60% and 90%!
Though HGOAX's aggression is a bit toned down since its 2008 days -- after HGOAX took a 45% beating compared to a 37% drop in the S&P 500 -- heavy holdings in tech and consumer cyclicals means investors still can expect a fair share of volatility.
HGOAX's load-waived A shares charge 1.22% in fees and require a $2,000 minimum investment.
T. Rowe Price Health Sciences
Category: Health Care
Fund Return for 2012: 35.18%
Category Return for 2012: 22%
Assets Under Management: $4.8 billion
Health care already tends to be a stable business, and the huge demographic shift of advancing boomers in the U.S. -- not to mention aging populations in Europe and parts of Asia -- make the sector's long-term prospects look even brighter.
One fund that hasn't had to wait for the long-term, though, is the T. Rowe Price Health Sciences Fund (PRHSX). A key reason is its focus on smaller companies, which have the opportunity for huge upside thanks to breakout drugs and treatments. Some of the fund's holdings include Pharmacyclics (PCYC), Incyte (INCY) and Regeneron Pharmaceuticals (REGN).
PRHSX also has posted a strong long-term track record, returning 14.76% annually for the past 10 years.
Health Sciences is a no-load fund that charges 0.82% in expenses and requires a $2,500 minimum investment.
TCW Emerging Markets Income
Category: Emerging-Market Bonds
Fund Return for 2012: 15.98%
Category Return for 2012: 13.01%
Assets Under Management: $5.1 billion
While it has been a rocky year for stocks in emerging markets, the story has been different for their debt.
Global investors have been searching for higher yields, and one of the beneficiaries has been the TCW Emerging Markets Income (TGEIX) fund.
Portfolio managers Penny Foley and Dave Robbins invest in a wide array of debt, ranging from high-quality sovereign securities to high-risk corporate junk bonds. But the pair have been able to navigate risk well, averaging 14.4% returns in the past three years.
The current yield of 5.56% is attractive, but keep in mind that a big part of this year's 16% gains has come from the rise in the values of the underlying bonds.
TGEIX is a no-load fee that charges 0.87% in expenses and requires a $2,000 minimum investment.
To find out what other funds have had a stellar year so far, check out the full top five here.
Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of "All About Short Selling" and "All About Commodities." Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.
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