First off, kudos to Tom Bemis over at The Tell on MarketWatch for his screen of the 10 best performing stocks since the last presidential election. What Tom shows is that … well, there’s no real trend to the results, with cars, techs, hotels and retail outfits (online and off) in the list. Or maybe the answer is: diversify.
This got me thinking about the same kind of statistic for mutual funds. Given the fact that the last election took place during the painful penultimate month of 2008, and there still was more pain to come, I figured that REIT funds or emerging-market funds or maybe gold funds would top the list. Well, timing is everything. Leveraged funds, gold funds, REITs and all manner of funds screened out as the top performers before Jeff DeMaso, Adviser Investments’ head of research, filtered sector and leveraged funds from the list.
The best fund over the four years through Friday, Nov. 2 (the most recent data at hand) is a tiny, $28 million mid-cap value fund called Oceanstone, focused on U.S. equities (it currently holds less than 20) and run by James Wang. Good, but not remarkable since its Nov. 2006 inception, the fund absolutely decimated the market since around the end of 2008. The fund’s report for the period ending June 2009 shows a $1.5 million portfolio of just 23 stocks. But Wang apparently likes to trade — turnover can run over 400%.
What — or who else — makes the list? You’ll see it’s a broad range of global, emerging-market and U.S. equity funds. In fact, like the stock list, the “best funds” list argues for diversification.
|Oceanstone||OSFDX||US Equity Mid-Cap||505.5%|
|Wasatch Emerging Markets Small Cap||WAEMX||Emerging-Markets Equity||198.6%|
|PIMCO StocksPLUS Long Duration Instl||PSLDX||US Equity Large-Cap Blend||180.7%|
Small Company A
|OSMAX||Global Equity Mid/Small-Cap||167.8%|
|Matthews Asia Small Companies||MSMLX||Asia ex-Japan Equity||157.3%|
|Huber Capital Small Cap Value Inv||HUSIX||US Equity Small-Cap||156.8%|
|T. Rowe Price New Asia||PRASX||Asia ex-Japan Equity||155.4%|
|Invesco Asia Pacific Growth A||ASIAX||Asia ex-Japan Equity||154.7%|
|Matthew 25||MXXVX||US Equity Large-Cap Growth||153.5%|
|Wasatch International Growth||WAIGX||Global Equity Mid/Small-Cap||151.6%|
|Robeco Long/Short Equity I||BPLSX||Long/Short Equity||150.1%|
|GMO Emerging Country Debt III||GMCDX||Emerging-Markets Fixed Income||146.2%|
|PIMCO Fundamental IndexPLUS TR A||PIXAX||US Equity Large-Cap Blend||145.1%|
|CSC Small Cap Value Investor||CSCSX||US Equity Small-Cap||144.8%|
|DFA Emerging Markets Small Cap I||DEMSX||Emerging Markets Equity||144.2%|
|Delaware Pooled Focus Smid-Cap
|DCGTX||US Equity Mid-Cap||139.3%|
|Westcore International Small Cap||WTIFX||Global Equity Mid/Small-Cap||139.0%|
|Hotchkis and Wiley Value
|HWAAX||US Equity Mid-Cap||136.8%|
|Aberdeen Emerging Markets Instl||ABEMX||Emerging-Markets Equity||136.4%|
|Wasatch International Opportunities||WAIOX||Global Equity Mid/Small-Cap||134.7%|
|Source: Morningstar Direct|
And what fund gets tagged with the “worst of” label? Can you say China — as in the USX China Fund (MUTF:HPCCX) ? It dropped more than 85%.
Maybe it’s a buy?
I doubt it. I’ll stick with diversification and top managers from Barrow Hanley, Wellington, PRIMECAP, Marketfield, Artisan, Vanguard, Fidelity and Three Peaks, to name a few.
Daniel P. Wiener is editor of The Independent Adviser for Vanguard Investors, a monthly newsletter that keeps abreast of recent developments at Vanguard.