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Why These 5 Mutual Funds Are Beating the S&P 500

What clues do the market leaders give us about what could be on deck for the second half of 2014?

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Beating a benchmark such as the S&P 500 Index over a six-month period of time does not require great portfolio management skill. If you decide to launch your own mutual fund and you build the portfolio by throwing 50 darts at a wall of 3,000 securities, you could do as well (or better) than the best of fund managers in any given six months.

mutual funds S&P 500However, there is some value to knowing which mutual funds are significantly beating the S&P 500 in the short term.

This short period is significant because, whether you are a trader or long-term investor, six months of market history can give clues about where the market is headed next. For example, sector funds that are leading the market now can tell us about the direction of the broader market and economy going forward.

As you might expect, hundreds of mutual funds are beating the S&P 500 through six months into 2014. To glean some meaning from our list of five, I selected funds from different categories, a few of which might come as a surprise to you. Therefore, these are not the absolute top performers of the year, but they certainly are smashing the S&P 500 and they are among the most outstanding and insightful of mutual fund leaders.

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