Mutual Funds

Technology Mutual Funds That Look Enticing

twocents@thestreet.com (Stan Luxenberg) — Wed, 08 Feb 2012 16:23 GMT

NEW YORK (TheStreet) -- Technology stocks have been rebounding. So far this year, technology funds have returned 12.4%, outpacing the S&P 500 by 5 percentage points, according to Morningstar.

Has the sector gotten expensive? No, say some fund managers. "Technology is just about as cheap as it has ever been," says Ian Warmerdam, portfolio manager of Henderson Global Technology.

Portfolio managers say that for much of the past two decades, technology stocks sold for price-to-earnings ratios of more than 15, a premium to the S&P 500. But now managers say that the forward P/E is 12, about the same as that for the S&P. ...

Click to view a price quote on HFGAX.

Government to Tighten Grip on Investments Three Years Too Late (Update 1)

twocents@thestreet.com (Frank Byrt) — Wed, 08 Feb 2012 16:01 GMT

(Adds that shares of several big money market fund managers slipped Tuesday on the report of the SEC's proposed industry changes.)

BOSTON (TheStreet) -- The Securities and Exchange Commission is floating several ideas about how to protect money market fund investors in the event of a financial panic. What has been proposed so far has the $2.7 trillion money market fund industry in a lather.

The SEC's proposals, still in the early stages, are seen hurting fund investor returns and likely precipitating big withdrawals, say fund industry representatives. ...

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Favorite Value Stocks

twocents@thestreet.com (Gregg Greenberg) — Mon, 06 Feb 2012 14:28 GMT

As evidenced by GM's latest numbers, the auto industry is roaring back and Russell Croft, portfolio manager for the Croft Value Fund, expects auto parts maker Dana Corp. to come along for the ride.

"Dana's new CEO is really focused on margins and we think that's a catalyst for the stock which is already trading cheaply at around seven times next year's earnings," says Croft. ...

Click to view a price quote on DAN.

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Bond Funds That Beat the Benchmarks in 2011

twocents@thestreet.com (Stan Luxenberg) — Fri, 03 Feb 2012 15:41 GMT

NEW YORK (TheStreet) -- Plenty of bond funds lagged the benchmarks last year. The problem was that portfolio managers emphasized shorter bonds and stayed away from Treasuries. Those were exactly the wrong moves in a year when long Treasuries soared.

Even bond star Bill Gross missed the mark. Gross figured that the red ink in Washington would push up interest rates, a move that would punish long bonds. As a result of the bad call, his PIMCO Total Return Fund gained only 3.8% for the year and trailed the Barclays Capital Aggregate Bond Index by more than 2 percentage points, according to Morningstar. Other big intermediate-term funds that lagged the benchmark by wide margins include Dodge & Cox Income and Metropolitan West Total Return .

The average intermediate-term bond fund trailed the benchmark by a percentage point. But some managers surged ahead of the pack. The winning managers held long Treasuries or used other strategies that succeeded in volatile markets. Intermediate funds that topped the Barclays index include Delaware Core Bond , RidgeWorth Total Return Bond , and Scout Core Plus Bond (SCPYX). ...

Click to view a price quote on DPFIX.

TheStreet Ratings 2012 Ultra Fund Families

twocents@thestreet.com (Kevin Baker) — Thu, 02 Feb 2012 15:12 GMT

NEW YORK (TheStreet Ratings) -- TheStreet.com Ratings ranked 14,478 open-end stock mutual funds offered by 461 different fund families on the basis of risk-adjusted return for our Winter 2011-12 Guide to Stock Mutual Funds. The top 30% of funds with grades of B+ or better are considered to be 'Buys', the middle 40% 'Holds' have grade in the C range, and the lower 30% 'Sells' have grades of D+ or worse.

The fund families placing a higher percentage of their funds in the top 30% of our year-end rankings than their peers are considered to be 'Ultra' fund families. Peer groups include fund families with 100 or more rated funds, 40 to 99 rated funds, 10 to 39 rated funds, and 1 to 9 rated funds.

...

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Appleseed's Top Picks Revealed

twocents@thestreet.com (Gregg Greenberg) — Tue, 31 Jan 2012 14:32 GMT

Andrea Jung is out as CEO of Avon, which means now is a good time to get into the cosmetics company's stock, says Appleseed Fund manager Josh Strauss.

"She destroyed a lot of capital by under-investing in the business. And we are hoping that the new CEO, whoever that may be, will be able to galvanize the business. That said, the valuation is very inexpensive and while we wait there's still a 5% dividend," says Strauss. ...

Click to view a price quote on AAPLX.

Barge Business is Booming

twocents@thestreet.com (Gregg Greenberg) — Mon, 30 Jan 2012 14:25 GMT

The barge business in America is booming, says Craig Hodges, portfolio manager for the Hodges Small Cap Fund , so investors should consider getting aboard Kirby Corp while they still can.

"It's an inland barge operator that's doing very well right now, and it will do even better when natural gas prices recover," says Hodges. ...

Click to view a price quote on HDPSX.

8 Newly Rated Stock Mutual Funds to Buy

twocents@thestreet.com (Kevin Baker) — Fri, 27 Jan 2012 11:30 GMT

NEW YORK (TheStreet Ratings) -- TheStreet.com Ratings initiated coverage of 179 stock mutual funds that accrued a sufficient track record of risk and performance data by the end of December 2011. 28 share classes of eight newly rated mutual funds earned initial grades in the 'buy' range, plus 60 funds at 'hold' and 91 funds at 'sell'.

Of the newly rated funds, only one ranked in the Excellent range of A- or better. Seven started out with grades in the Good range of B- to B+.

Here are the 8 newly rated funds ranked at 'buy': ...

Click to view a price quote on ASRRX.

Tobacco & Pipeline Stocks with High Yields

twocents@thestreet.com (Gregg Greenberg) — Thu, 26 Jan 2012 14:41 GMT

It may seem tough, but it is possible to find stocks with both high yields and strong growth prospects, says James Wong, portfolio manager for the Payden Value Leaders fund . For example, in the energy space, Wong says natural gas and oil pipeline player Enbridge Energy fits the bill quite nicely.

"It has a yield of about 7% and it has consistently increased its dividend over the past 20 years. The company is a nice cash cow and that's hard to beat in this environment," says Wong. ...

Click to view a price quote on PYVLX.

4 Emerging Market Funds to Watch

twocents@thestreet.com (Stan Luxenberg) — Tue, 24 Jan 2012 17:21 GMT

NEW YORK (TheStreet) -- Frightened by slowing global growth and the European debt crisis, investors dumped emerging market stocks last year. Diversified emerging markets funds dropped 19.9%, according to Morningstar. That was a disappointing performance in a year when the S&P 500 gained 2%.

Should you avoid the emerging markets? Probably not. For starters, stocks in the emerging markets remain reasonably priced. According to Morningstar, portfolios of emerging markets funds have a price-earnings ratio of 14. That's less than the figure for U.S. funds.

In addition, many countries in Asia and Latin America are continuing to report healthy growth. The emerging markets now have a long track record for delivering strong market gains. During the past decade, emerging markets funds returned 12.8% annually, outpacing the S&P 500 by about 10 percentage points. ...

Click to view a price quote on EMGAX.

Bond Funds Offer Firmer Check Against Risk

twocents@thestreet.com (Stan Luxenberg) — Mon, 23 Jan 2012 15:23 GMT

NEW YORK (TheStreet) -- With markets swinging wildly in recent years, many investors have come to fear that the old rules about diversification no longer apply. According to the traditional approach, it paid to diversify by holding a wide range of assets, including foreign stocks, corporate bonds and real estate. The idea was that when the S&P 500 fell, other assets might prove resilient and cushion losses. But in 2008, nearly everything dropped at once.

Since then stocks have rebounded, but many asset classes have provided little diversification. Last year assets such as foreign stocks and U.S. small caps rose and fell in lockstep. Even gold and oil, which once provided strong diversification, generally tracked the S&P 500. "In 2011, we saw extreme correlations," says Stuart Rosenthal, CEO of Factor Advisors.

Rosenthal attributes the market action to what has been called "Risk on, risk off" trading. When the economic news looks positive, millions of investors around the world become optimistic and buy risky assets, such as stocks and high-yield corporate bonds. When the news shifts, investors turn sour and sell, dumping stocks of all kinds. Rosenthal says the erratic trading is likely to continue this year as investors fret about the debt crisis in Europe and sluggish growth in the U.S. ...

Click to view a price quote on WEFIX.

3 Top Dividend Stocks For 2012

twocents@thestreet.com (Gregg Greenberg) — Wed, 18 Jan 2012 14:10 GMT

Just because the economy is growing does not mean investors should abandon high-paying dividend stocks in favor of growth names, says Oliver Pursche, co-portfolio manager of GMG Defensive Beta Fund .

"No one is saying you shouldn't own growth stocks. The point is that dividends are a key component of total return, so investing in high-quality, high dividend paying stocks that also have growth characteristics should do very well in 2012, just like it did in 2011," says Pursche.

The $20 million fund, which launched in August 2009, has dropped 3.4% over the past 12 months, ranking it in the 66th percentile of Morningstar's multi-alternative investment category. ...

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Corbett Likes the Midas Touch

twocents@thestreet.com (Gregg Greenberg) — Tue, 17 Jan 2012 18:54 GMT

Though the past few years have been tough on micro-cap companies, Michael Corbett, portfolio manager of the Perritt Micro Cap Opportunities Fund, sees a brighter outlook for the market's minnows in 2012.

"Valuations have come in and we've had a big multiple contraction within the space. As a result, we think things will improve going forward," says Corbett.

The $315 million fund, which garners 3 stars from Morningstar, is down 11% over the past 12 months, putting it in the 95% percentile in Morningstar's small blend fund category. Over the past three years, the fund has returned an average of 20.5% annually, outpacing 55% of its Morningstar rivals. ...

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Why Infrastructure Mutual Funds Hold Up

twocents@thestreet.com (Stan Luxenberg) — Tue, 17 Jan 2012 16:18 GMT

NEW YORK (TheStreet) -- Most global funds sank last year.

With investors unnerved by debt problems and sluggish economic growth, stocks sank in Europe and the emerging markets.

During 2011, Morningstar's category of world stock funds, which invest in U.S. and foreign markets, lost 7.9%. ...

Click to view a price quote on CSUAX.

Real Estate Funds That Pay Rich Yields

twocents@thestreet.com (Stan Luxenberg) — Wed, 11 Jan 2012 15:59 GMT

NEW YORK (TheStreet) -- If you are searching for decent yields, consider real estate mutual funds that focus on delivering income.

Some of these mutual funds yield more than 5%. That's an appealing payout at a time when 10-year Treasuries yield 1.94%.

Funds with fat payouts include Fidelity Real Estate Income, Forward Select Income and Lazard U.S. Realty Income. ...

Click to view a price quote on FRIFX.

16 Stocks Picked by Prize-Winning Fund Managers

twocents@thestreet.com (Frank Byrt) — Fri, 06 Jan 2012 18:57 GMT

(To add that Cisco Systems is showing signs of a turnaround with an outlook of 7% to 8% revenue growth in its current fiscal quarter.)

BOSTON (TheStreet) -- Morningstar, the mutual fund research firm, said Artisan Partners' investment team of Scott Satterwhite, James Kieffer and George Sertl is its Domestic Stock Fund Manager of the Year for 2011.

Artisan Partners isn't a household name like Fidelity, Vanguard and BlackRock are. So it's worth breaking down the small firm's investment strategy and stock picks, especially since 2012 is expected to be another tough year for investing. ...

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Deep-Value Funds for Patient Investor

twocents@thestreet.com (Stan Luxenberg) — Wed, 04 Jan 2012 17:17 GMT

NEW YORK (TheStreet) -- Deep-value funds struggled last year.

Among the worst performers was Third Avenue Value, which lost 20.7% and lagged 96% of peers in the world stock category, according to Morningstar. Other funds that finished in the bottom half of their categories include Oakmark International, Vanguard Windsor and Mutual Shares.

Seeing the bad results, investors are dumping deep-value funds. But that could be a mistake. For patient investors, deep-value funds can be intriguing holdings that help to diversify portfolios. ...

Click to view a price quote on TAVFX.

Fund Family Soars in Tough Times

twocents@thestreet.com (Stan Luxenberg) — Tue, 03 Jan 2012 15:50 GMT

NEW YORK (TheStreet) -- James Small Cap has been on a tear. During the past year, the fund returned 10.9%, ranking as the top-performing small, value fund, according to Morningstar. James outdid the No. 2 finisher by 5 percentage points.

The strong showing can be attributed partly to luck. James prefers stocks with solid earnings, which have been in favor lately. But the fund has delivered successful returns in a variety of market conditions. During the past decade, James Small Cap returned 8.8% annually, outdoing 86% of competitors. James Balanced: Golden Rainbow , which holds many of the same stocks as the small-cap fund, also boasts a strong record. During the past decade, the balanced fund returned 7.4% annually, outdoing 98% of its peers in Morningstar's conservative allocation category.

The James funds follow a strategy developed by Frank James, who founded James Investment Research and now runs the company along with his son Barry. For his Ph.D. dissertation in the 1960s, Frank sought the Holy Grail of investing: a simple system that could pick winning stocks....

Click to view a price quote on JASCX.

10 Best Funds for Bear Markets

twocents@thestreet.com (Kevin Baker) — Fri, 30 Dec 2011 13:27 GMT

NEW YORK (TheStreet Ratings) -- TheStreet.com Ratings reviews the risk-adjusted return performance of around 25,000 funds every month. With our economy on the mend and corporate profits on the up-swing, a bear market for most domestic stocks is not a good bet.

However, our list of the best bear market funds highlights other places where downside gains can still be made. Of course, none of the following inverse funds are appropriate for long-term holdings and should never account for more than a small hedge position within an overall diversified portfolio.

The following funds present compelling vehicles for short-term speculation where, due to recent weakness, bear markets may exist. ...

Click to view a price quote on INDZ.

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Heartland Outperforms in Long Haul

twocents@thestreet.com (Stan Luxenberg) — Thu, 29 Dec 2011 15:44 GMT

NEW YORK (TheStreet) -- This has been a frustrating year for Heartland Funds. All three of the company's domestic equity funds trailed the average results of their categories. The laggards include Heartland Select Value , Heartland Value , and Heartland Value Plus .

But shareholders should not despair. Heartland follows a diehard contrarian approach, buying depressed shares in unloved sectors. Because it is often out of step with the markets, the Heartland approach can trail during some years. Still, patient investors have been rewarded. Over long periods, the funds have all topped their category averages by wide margins. The results are particularly noteworthy because the Heartland funds have recorded moderate risk scores.

This year the Heartland portfolio managers have been favoring unloved cyclical businesses, including industrial and materials stocks. Those have languished at a time when investors have sought safety in solid blue chips with strong balance sheets, including Coca-Cola and Colgate-Palmolive . But the Heartland managers are not about to change their strategy. The managers contend that the blue chips should trail unloved cyclicals if the economy continues mending. "A lot of the market favorites have gotten ahead of themselves," says Ted Baszler, portfolio manager of Heartland Select Value. ...

Click to view a price quote on HRSVX.

Two Fund Alternatives to REITs, Utilities

twocents@thestreet.com (Stan Luxenberg) — Fri, 23 Dec 2011 15:23 GMT

NEW YORK (TheStreet) -- In recent months, investors have been pouring into shares of utilities and real estate investment trusts. The stocks pay rich dividends -- an important attraction at a time when many share prices have been flat. While the S&P 500 returned 0.8% this year, utilities funds returned 9.1% and real estate funds gained 5.9%, according to Morningstar.

Now some fund managers worry that the winning sectors are no longer bargains. The managers are emphasizing other industries or staying away from REITs and utilities altogether. "A lot of the best-performing stocks are priced near the higher end of their historical ranges," says Todd Lowenstein, portfolio manager of HighMark Value Momentum . "When the markets calm down, the expensive sectors will underperform."

Lowenstein is particularly concerned about utilities. Because they tend to be slow-growing businesses, utilities have traditionally sold for a price-earnings ratio that is 25% below the figure for the overall market. But these days, the sector has a forward P/E of 14, compared to a figure of 13 for the S&P 500. ...

Click to view a price quote on WASIX.

Beat the Stock Market by Picking Fund-Award Winners

twocents@thestreet.com (Frank Byrt) — Thu, 22 Dec 2011 19:22 GMT

(Adds that Sequoia fund has benefitted by outperforming its peers in down markets.)

BOSTON (TheStreet) -- Morningstar's nomination of five fund-management teams for its annual award comes just in time for investors torn between leaving the equity markets or preparing for what may be a rally next year.

As the S&P 500 Index struggles to close out 2011 with a gain -- it's down 1.1% -- the best performer among the group has reaped a return of 11.8%, about 50% higher than the historical average. That would be the Sequoia Fund, last year's winner. ...

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Hatteras: Tenderonis Wanted

twocents@thestreet.com (Stan Luxenberg) — Tue, 20 Dec 2011 20:56 GMT

NEW YORK (TheStreet) -- The financial crisis clobbered hedge funds. Many suffered big losses in 2008, and hundreds went out of business. That has left investors wary about trying small funds with short track records. Seeking security, many institutions and individual investors have been sticking with large hedge funds that delivered competitive returns during the downturn.

According to data provider Preqin, 66% of fund investors would not consider managers with track records of less than three years. Many institutions will only invest in hedge funds with more than $300 million in assets. "It is getting harder and harder for smaller funds to survive," says Nadia Papagiannis, alternative investment strategist for Morningstar.

However, the flight to blue-chip funds could lead to lower returns. According to a recent study by hedge fund analyst PerTrac, small funds tend to outdo large ones, and young funds surpass older portfolios. Examining returns from 1996 through 2010, PerTrac compared three groups of hedge funds: Emerging funds that were less than two years old, mid-age funds that were two to four years old, and veteran funds with track records of more than four years. During the period, emerging funds returned 16.2% annually, while the mid-age group returned 12.2%, and the veterans only delivered 10.9%. Small funds with less than $100 million in assets outdid larger funds by a wide margin....

Click to view a price quote on ALPHX.

Blue-Chip Dividend Stocks: Buy Like SVAAX

twocents@thestreet.com (Stan Luxenberg) — Mon, 19 Dec 2011 19:41 GMT

NEW YORK (TheStreet) -- While most funds have struggled lately, Federated Strategic Value Dividend has soared. Federated returned 11.9% in the past year, topping 99% of large value funds and surpassing the S&P 500 by 11 percentage points, according to Morningstar. The winning streak occurred because Federated focuses on one of the market's hottest segments: blue-chip dividend stocks. The portfolio is full of such familiar names as H.J. Heinz and Johnson & Johnson , rock-solid companies that have appealed to nervous investors.

Since blue chips move in and out of favor, Federated is not likely to excel every year. But the fund makes an intriguing pick because it has a track record for limiting losses during difficult times and delivering decent results in bull markets....

Click to view a price quote on SVAAX.

Why Acacia Research, HMS Holdings Top Small Cap list for 2012

twocents@thestreet.com (Gregg Greenberg) — Mon, 19 Dec 2011 15:35 GMT

Twin Disc may seem like a sleepy marine equipment-maker, but Jim Oberweis, portfolio manager for the Oberweis Emerging Growth Fund , says the company is poised to take-off in 2012 as a result of the boom in natural gas drilling.

"They are just launching a new product that is specifically designed for shale fracking, and right now there is no product on the market to meet the need they are filling. We think it will gain traction in 2012," says Oberweis.

The $70 million fund has fallen 12% over the past year, putting it in the 92nd percentile in Morningstar's small cap growth category. Over the past three years, the fund has returned an average of 21.4% annually, outpacing 71% of its Morningstar rivals. ...

Click to view a price quote on OBEGX.

10 Best Mutual Funds of 2011 You've Never Heard Of

twocents@thestreet.com (Frank Byrt) — Fri, 16 Dec 2011 17:19 GMT

(To update with comments from EPFR Global regarding fund flows.)

BOSTON (TheStreet) -- In what's been a brutal year for the mutual fund industry, managers including Robert Goldfarb, William Joyce and Tom Ognar earned their keep and served as examples for more well-known peers and up-and-comers.

Large-cap stock funds are on pace to finish well behind the benchmark S&P 500's 1.7% decline, with most set to close out 2011 with high-single digit or double-digit losses. ...

Click to view a price quote on SO.

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13 Fund Managers Who Lost Among the Most Money

twocents@thestreet.com (Frank Byrt) — Thu, 15 Dec 2011 20:46 GMT

(Adds fund managers up for Morningstar award.)

BOSTON (TheStreet) -- Bill Miller, Bruce Berkowitz and Kenneth Heebner are among legendary mutual fund managers who have trailed their benchmarks by wide margins this year, hurt by a no-show economic recovery, a financial-industry rout and record volatility.

A total of 72% out of 261 large-cap core funds are underperforming their indices, according to Goldman Sachs. For the 110 large-cap value funds, it's 62%; and among 216 large-cap growth funds, it's a stunning 84%. This at a time when the benchmark for most of them, the S&P500 Index, is little changed in 2011. ...

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Why Shopping for Macy's is a Super Smart Move

twocents@thestreet.com (Gregg Greenberg) — Wed, 14 Dec 2011 17:31 GMT

The obituary for the department store has been written many times, but Pat Dunkerley, portfolio manager of the Scout Mid Cap Fund says Macy's continues to thrive in the face of doubters.

"Their MyMacy's localization initiative is bringing the right merchandise into the stores and their comp sales are moving higher," says Dunkerley.

The $822 million fund, which garners a full 5 stars from Morningstar, is up 1.5% over the past year, better than 92% of its peers. Over the past five years, the fund has returned an average of 8.3% annually, outpacing 99% of its Morningstar rivals. ...

Click to view a price quote on UMBMX.

Humana, Gilead: Top Corporate Bonds for 2012

twocents@thestreet.com (Gregg Greenberg) — Tue, 13 Dec 2011 18:53 GMT

The key is to investing in corporate bonds in 2012 is to identify companies that have used the low interest rate environment to their advantage, says Scott Kimball, portfolio manager for the Marshall Corporate Income fund , who is particularly bullish on issues from Transocean , Humana and Gilead Sciences.

The $97 million fund, which launched in December 2008, has returned 7% over the past year, outpacing 86% of its rivals in Morningstar's intermediate-term bond fund category.

As for healthcare insurance provider Humana, Kimball is confident that concerns over a negative Supreme Court ruling on President Barack Obama's healthcare legislation won't undermine the company's credit. In Kimball's view, the issues facing the Court are not unique to Humana and the key is to identify industry competitors that will best weather the risk. ...

Click to view a price quote on MCIIX.

Value Veterans: Lot to Like in Stock Market

twocents@thestreet.com (Stan Luxenberg) — Tue, 13 Dec 2011 15:12 GMT

NEW YORK (TheStreet) -- With the stock market swinging wildly, plenty of shareholders are dumping stock funds and shifting to Treasuries.

But not all investors are gloomy. After the rough stock market of last summer, shares of many companies slipped to bargain levels, says Christopher Welch, portfolio manager of Diamond Hill Small-Mid Cap. "This is a time when you can find lots of very high-quality companies that are undervalued," he says.

Welch, a die-hard value investor, is hardly alone. Other veteran value fund managers say that they are buying at a time when good stocks are being dumped for little or no reason. ...

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