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7 Surprisingly Good Funds in 2012

Contrarian plays have paid off, and one fund made a comeback

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JHancock Financial Industries A

After the massive financial collapse and subsequent TARP bailouts, investors have plenty of reason to still fear the banking and financial industry.

Not worried are the portfolio managers of the JHancock Financial Industries Fund (MUTF:FIDAX), whose top holdings include companies like Wells Fargo (NYSE:WFC), JPMorgan (NYSE:JPM) and American Express (NYSE:AXP).

So far this year, the fund has posted a return of 16%, and it has returned an annual average of 12% for the past three years.

BlackRock High Yield Bond

While market uncertainty has put Treasurys and defensive stocks in high demand this year, yield-champion junk bonds have gotten some love, too. On their own, junk bonds can seem a little scary, but they make a great income option as part of a diversified portfolio.

Take a look at the BlackRock High Yield Bond Fund (MUTF:BRHYX), which has about $7.6 billion in assets. The fund’s portfolio manager, James Keenan, is a skilled numbers-cruncher and knows how to evaluate credit risk, and he has steered BRHYX to returns of 8.5% year-to-date.

Columbia Acorn European I

Investing in Europe might be one of the most contrarian moves this year, but it has panned out for the Columbia Acorn European Fund (MUTF:CAFIX). So far in 2012, CAFIX’s gain is a healthy 9%.

The fund focuses on deep fundamental analysis. So even though Europe has had more than its share of calamity, CAFIX’s management has found companies that can thrive in any environment. The fund also will invest in smaller companies and even IPOs.

Total Return Fund

When it comes to bond investing, PIMCO’s Bill Gross is the grand master. But last year, his performance faltered as he missed the big rally in Treasuries. This resulted in the PIMCO Total Return Fund (MUTF:PTTRX) finishing flat and dropping to the bottom third of its peers, and inevitably, the media clobbered him.

This year, Gross has turned the ship around. The Total Return Fund has made an impressive comeback, with a gain of 5.75% putting the fund above 96% of its peers.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of the upcoming book How to Create the Next Facebook: Seeing Your Startup Through, from Idea to IPO.  Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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