It has been an interesting 12 months for stocks and mutual funds. Equities surged off the 2009 lows, gave up much of their gains and then earned some of it back. Year to date, the broader market has squeaked out a small gain, and over the last 12 months the major indexes are sitting on gains of around 15%.
The historic rally from last year’s lows were interrupted by a series of scares this spring, from the “flash crash” to the Gulf oil spill to the euro crisis, and it was one wild ride.
But just because the broader market is flat in 2010 and some of the market’s 2009 momentum has waned, that doesn’t mean there aren’t investments that are working right now and delivering profits to investors.
Precious metals, emerging markets and small to mid-cap mutual funds have led the way in 2010. Energy and health care funds, on the other hand, have lagged. High-yield and long-term bond mutual funds have also outperformed the S&P 500 with stellar returns.
Here are three top-performing funds over the past year or so in select categories.
Top Mutual Fund – Aegis Value (AVALX)
Strategy: Small Cap Value
Total assets: $156.6 million
Minimum initial investment: $10,000
12 month return: +40%
Aegis Value (AVALX) has nearly tripled the market’s return in the last 12 months, setting it head and shoulders above many other funds. Manager Scott Barbee is a deep value investor who looks for companies he believes are undervalued relative to the market based on measures such as book value, revenues or cash flow. He has the flexibility to invest in large-caps and foreign stocks.
Top 5 Holdings (by percent of net assets June 1) include: Delta Apparel (AMEX: DLA), Alliance One International (NYSE: AOI), PMA Capital (NASDAQ: PMACA), Horsehead Holding (NASDAQ: ZINC) and Bassett Furniture (NASDAQ: BSET).
Top Mutual Fund – John Hancock High-Yield I (JYHIX)
Strategy: High Yield Bond
Total assets: $995.3 million
Minimum initial investment: $250,000
12-month return: +35%
Though there is a big minimum balance to get in the door, John Hancock High-Yield I (JYHIX) appears to be worth the money, more than doubling the performance of the broader market in the last year with a +35% return. Managers are Arthur N. Calavritinos (since 1998) and Dennis F. McCafferty (since 2009). The fund invests at least 80% of its net assets in U.S. and foreign fixed-income securities rated BB/Ba or lower. Up to 10% of the fund’s assets may be invested in securities that are default. Calavritinos and his team identify the most promising industry sectors to invest in using top-down analysis, and then select the most promising securities within those sectors. About 70% of the portfolio is based in various U.S. corporate bonds, and the portfolio then includes convertibles, foreign bonds, mortgage pass-thrus and other flavors.
Top Mutual Fund – First Eagle Gold C (FEGOX)
Strategy: Precious Metals
Total assets: $402.4 million
Minimum initial investment: $2,500
12-month return: +23%
The First Eagle Gold C Fund (FEGOX) has been managed by Abhay Deshpande and Rachel Benepe since March 2009. The mutual fund seeks long-term growth by investing at least 80% of total assets in gold and or securities directly related to gold. The fund may also invest directly in other precious metals. It’s worth noting that gold is up about 34% in the past year so the gold bugs who bought bullion technically are better off than investors in this fund. But for those of you that don’t want to stock a safe full of gold bars, FEGOX could be a practical mutual fund for your portfolio with only a $2,500 minimum buy-in.
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