Well, at least one area in the financial world has seen growth for the past few years: negative news.
Unemployment continues to be bleak. Europe is on the verge of implosion. China is slowing down. So is it any wonder that average Joes have been staying away from the markets?
Still, if you check out the mutual fund industry, you actually can find a few signs of hope. Even amid the markets’ volatility, a number of portfolio managers have been able to generate impressive returns. Here’s a look at seven funds that have been surprisingly strong performers this year:
Nile Pan Africa A
When thinking about where in the world you want to invest, Africa’s not a name that comes up often. But if you look at the facts, there’s definitely opportunities. Africa is the world’s second-largest continent (behind Asia) in terms of land area and population. Even though poverty still is a huge problem, Africa has seen steady gains in economic growth for decades. The continent also has plentiful resources, such as oil and platinum.
With few analysts covering those markets, an astute investor can uncover some attractive investments. This has been the case with the Nile Pan Africa Fund (MUTF:NAFAX), which is up about 21% for 2012. The head of the fund, Larry Seruma, scours the 53 nations in Africa to find solid companies, and he also has been savvy in finding smaller growth plays.
Fidelity Advisor Biotechnology I
The biotech industry hasn’t had it easy. Despite continued innovation in the field, as biotechs continue to attack big-ticket ailments like HIV/AIDS, cancer, Alzheimer’s and diabetes, the IPO market has been dormant — venture capitalists have been more interested in finding the next Facebook (NASDAQ:FB) than the creator of the next great cure.
Still, there’s plenty of sizzle in the space. One of the top funds for the industry is the Fidelity Advisor Biotechnology Fund (MUTF:FBTIX), which has enjoyed a scorching 31% so far this year. It’s no fluke — FBTIX has averaged 24% gains annually in the past three years.
And there’s some attractive long-term trends ahead. A big one: Traditional pharma firms continue to lose patent protection on a variety of mega-drugs, and many don’t have enough treatment candidates to replace the shortfall. The only viable option for these companies? Buy smaller biotechs.
American Century Real Estate A
Who thought real estate was going to be a hot area for investors this year? Hardly anyone. But the real estate market is starting to look interesting, helped by dirt-cheap mortgage rates and little increase in supply since the bust in 2006.
These trends are helping to boost the performance of the American Century Real Estate Fund (MUTF:AREEX). AREEX holds companies like Simon Property Group (NYSE:SPG), Vornado Realty Trust (NYSE:VNO) and Equity Residential (NYSE:EQR), and it has posted a return of 15% this year.