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Best Mutual Funds Since the 2008 Election

The top performer? A mid-cap fund with just $28 million in assets


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.

Fund Ticker Style Return
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%
Oppenheimer International
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
Growth Equity
DCGTX US Equity Mid-Cap 139.3%
Westcore International Small Cap WTIFX Global Equity Mid/Small-Cap 139.0%
Hotchkis and Wiley Value
Opportunities A
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.

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