Mutual fund performance depends on many things: the number of stocks in the fund’s portfolio, for example, the fees that the fund charges and the manager’s drinking habits.
A fund’s performance shouldn’t depend too heavily on the rotation of the Earth around the sun, however, unless the planet strays into some alien’s shipping lane. But that’s precisely how we measure performance: How did my fund do this year? Last year? The past 10 years?
It’s much more useful to measure a fund by how it has performed during market cycles. Ideally, you’d like a fund that fares better than its peers in both bull and bear markets. We’ve had two bull and two bear cycles in the past decade, and a few funds have done exceptionally well in good times and bad. Although we never know what the next market will be like, these all-weather funds are worth a look.
We should give honorable mention to Bridgeway Aggressive Investors I (ticker: BRAGX), which is currently closed to new investors. The fund has soared 399 percent the past 10 years. A similar fund, Bridgeway Aggressive Investors II (BRAIX) is still open for new investors.
Among conservative funds, Gabelli Equity-Income (GABEX) has gained 106 percent the past 10 years. It slid just 7.9 percent in the 2000-2002 bear market.
Other funds worth a look:
Large-company growth. Janus Advisor Forty (JDCAX) beat its peers – in bull and bear cycles – and has gained 110 percent the past decade.
Large-company value. Value funds look for stocks of beaten-up, misunderstood companies. Broker-sold MFS Value (MEIAX) fell just 3 percent during the 2000-2002 bear market. The fund has fallen 12 percent since October 2007, vs. 17 percent for the average large-cap value fund.
Large-company core. Core funds are an amalgam of growth and value: They’re often called GAARP funds, for “growth at a reasonable price.” Broker-sold Victory Diversified Stock A (SRVEX) has gained 103 percent the past 10 years; its manager has been at the helm nearly 20 years. For no-load fans, TCW Equities I (TGLVX) has gained 80 percent the past decade, and offers a low 0.76 percent expense ratio, too.