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TheStreet.com Ratings: 'Ultra' Fund Families

Kevin Baker

11/10/06 - 10:55 AM EST
Back on Aug. 19, when I published the first "Top 5 'Ultra' Funds" article, I had no idea how huge the response would be. Readers sent in comments, and Dreyfus put out a press release.

The purpose of the list is to provide investors looking to minimize transaction costs with suggestions for fund families that have many good funds. The groups with the most funds in the top-200 list of our Quarterly Guide to Mutual Funds qualify as 'ultra' fund families. This time the number of ultra funds was slightly higher than the last quarter, because of ties.

MFS, a unit of Sun Life Financial(SLF Quote), topped the list again for the third quarter, with 14 funds. BlackRock (BLK Quote), Dreyfus, a unit of Mellon Financial(MEL Quote),and Putnam Investments tied for second with nine funds. AIM, a unit of Amvescap PLC(AVZ Quote), Fidelity and Vanguard tied for third place with eight funds.

One comment I received suggested that the results should be given without the effect of multiple share classes. Even when the clones are eliminated, MFS still comes out on top with six unique funds. Dimensional Investments and Putnam followed with five. AIM, Fidelity, GMO and Vanguard each had four unique funds.

And lastly, Ameriprise Financial(AMP Quote), BlackRock, Dreyfus, Franklin Templeton, also known as Franklin Resources (BEN Quote), Phoenix Investment Partners, a subsidiary of The Phoenix Companies(PNX Quote), and TIAA-CREF each had three unique funds in the top 200.

Taking a much wider view than just the top 200 funds, there are 30 fund families that have 100 or more funds for which TheStreet.com Ratings assigns rankings. The list below shows how many funds we rate for each fund family and the percentage of those funds that fall in the top 30%, middle 40% and bottom 30% of our universe of open-end stock mutual funds.

With our risk-adjusted return model, a ranking in the top 30% of funds represents an overall investment rating from A-plus down to B-minus. The middle 40% includes C-plus, C and C-minus. The bottom 30% ranges from D-plus down to E-minus. To be ranked, a fund must have at least three years of data available.

Cream of the Fund Crop
Fund families with over 100 rated funds
Fund Family Name # of Funds Rated Top 30% Middle 40% Bottom 30%
American Funds 211 70.6% 25.6% 3.8%
Franklin Templeton 194 54.6% 24.7% 20.6%
Vanguard 112 53.6% 35.7% 10.7%
Goldman Sachs 129 50.4% 22.5% 27.1%
Allianz Global Investors 117 47.9% 19.7% 32.5%
T. Rowe Price 111 45.9% 44.1% 9.9%
Ameriprise Financial 109 45.9% 29.4% 24.8%
Hartford Funds, The 109 41.3% 37.6% 21.1%
AIM Investments 148 41.2% 35.1% 23.6%
Pioneer Investments 108 38.9% 22.2% 38.9%
BlackRock 232 37.1% 35.3% 27.6%
Principal Financial Group 225 36.4% 37.3% 26.2%
Morgan Stanley 199 36.2% 42.2% 21.6%
Dreyfus 261 34.1% 39.8% 26.1%
JPMorgan Funds 238 33.6% 45.0% 21.4%
Gartmore 147 32.7% 40.1% 27.2%
DWS Scudder 166 31.9% 36.7% 31.3%
Evergreen Investments 102 31.4% 34.3% 34.3%
American Century Investments 139 30.2% 36.7% 33.1%
Van Kampen 143 30.1% 44.8% 25.2%
Columbia Funds 379 28.8% 50.7% 20.6%
Delaware Investments 101 26.7% 41.6% 31.7%
Wells Fargo Advantage 193 25.9% 40.9% 33.2%
MFS 311 25.7% 40.2% 34.1%
OppenheimerFunds 140 25.0% 23.6% 51.4%
ING Investments, LLC 307 24.1% 41.4% 34.5%
Fidelity 499 22.0% 52.3% 25.7%
Putnam Funds 384 21.9% 60.2% 18.0%
Alliance Bernstein 289 19.4% 55.0% 25.6%
Legg Mason 136 11.0% 45.6% 43.4%
Source: TheStreet.com Ratings

The standout winner is American Funds with 70.6%, or 149, of its 211 ranked funds in our top 30% and just eight funds, or 3.8%, in the bottom 30%. Franklin Templeton, Vanguard and Goldman Sachs(GS Quote), also excelled, having more than half their ranked funds in the top 30%.

A fund family does not have to be huge to warrant recognition or consideration. In the next tier of fund families, those with between 40 and 99 ranked funds, Ivy Funds, a unit of Waddell & Reed Financial(WDR Quote), and UBS Global Asset Management, a unit of UBS AG(UBS Quote), topped our list.

Highly Rated
Fund families with 40-99 rated funds
Fund Family Name # of Funds Rated Top 30% Middle 40% Bottom 30%
Ivy Funds 68 47.1% 41.2% 11.8%
UBS Global Asset Management 65 40.0% 26.2% 33.8%
STI Classic Funds 50 38.0% 38.0% 24.0%
Lord Abbett 75 36.0% 42.7% 21.3%
Gabelli Funds 75 34.7% 34.7% 30.7%
MainStay Funds 91 33.0% 46.2% 20.9%
BB&T Funds 46 32.6% 47.8% 19.6%
Pacific Life Group 72 31.9% 34.7% 33.3%
Russell Funds 70 31.4% 52.9% 15.7%
MassMutual Funds 97 30.9% 24.7% 44.3%
First American 99 29.3% 46.5% 24.2%
Strategic Partners 76 27.6% 28.9% 43.4%
Old Mutual Funds 62 25.8% 17.7% 56.5%
Eaton Vance 82 25.6% 40.2% 34.1%
AXA Enterprise Funds 84 23.8% 35.7% 40.5%
Janus Fund 56 23.2% 41.1% 35.7%
GE Investment 44 22.7% 50.0% 27.3%
Credit Suisse Funds 50 22.0% 40.0% 38.0%
JennisonDryden 84 21.4% 60.7% 17.9%
Allegiant Funds 48 20.8% 45.8% 33.3%
Waddell & Reed 55 20.0% 43.6% 36.4%
Federated Investors 69 18.8% 46.4% 34.8%
Fifth Third Funds 81 18.5% 37.0% 44.4%
Phoenix Funds 85 17.6% 38.8% 43.5%
MTB Funds 43 16.3% 16.3% 67.4%
John Hancock 93 16.1% 40.9% 43.0%
Munder Funds 59 15.3% 61.0% 23.7%
Seligman Group 94 14.9% 56.4% 28.7%
ProFunds 76 14.5% 26.3% 59.2%
SunAmerica 74 13.5% 20.3% 66.2%
Rydex Funds 83 13.3% 30.1% 56.6%
IXIS Advisor Funds 40 10.0% 65.0% 25.0%
IDEX Funds 76 7.9% 44.7% 47.4%
PIMCO Funds 68 4.4% 52.9% 42.6%
Source: TheStreet.com Ratings

If you don't like to keep all your eggs in one basket, there are smaller fund families with noteworthy performances among which you can pick and choose. There are 73 fund families that have between 10 to 39 ranked funds. Below are the 20 best-performing fund families of this group.


Many Winners Too
Fund families with 10-39 rated funds
Fund Family Name # of Funds Rated Top 30% Middle 40% Bottom 30%
Diamond Trusts 11 90.9% 9.1% 0.0%
Lazard Funds 13 84.6% 0.0% 15.4%
Dimensional Investment Group 23 78.3% 21.7% 0.0%
American AAdvantage 25 72.0% 24.0% 4.0%
Thornburg Funds 15 66.7% 33.3% 0.0%
Davis Funds 26 65.4% 34.6% 0.0%
TIAA-CREF Funds 25 64.0% 28.0% 8.0%
Vantagepoint Funds 19 63.2% 31.6% 5.3%
Harbor Funds 24 58.3% 4.2% 37.5%
Oakmark 12 58.3% 41.7% 0.0%
Hotchkis & Wiley 14 57.1% 14.3% 28.6%
GMO Funds 36 55.6% 22.2% 22.2%
Optimum Funds 20 55.0% 25.0% 20.0%
Pacific Capital 22 54.5% 18.2% 27.3%
First Eagle 15 53.3% 26.7% 20.0%
Nuveen Mutual Funds 24 50.0% 33.3% 16.7%
Forward Funds, Inc. 10 50.0% 20.0% 30.0%
Kinetics Mutual Funds 10 50.0% 0.0% 50.0%
Schwab Funds 29 48.3% 48.3% 3.4%
Barclay's Global 11 45.5% 54.5% 0.0%
Source: TheStreet.com Ratings

That leaves exactly 300 fund families with fewer than 10 funds we rank. Two of those families have all of their funds ranked in the top 30%. They are Third Avenue, a unit of Affiliated Managers(AMG Quote), with four funds, and Dodge & Cox, with three funds.

Whether you decide to keep your retirement eggs at one large firm or spread them out among several smaller ones, the fund family you choose today can make all the difference in the world.

Brokerage Partners