TheStreet.com Ratings: The Top Fund Families
Kevin Baker
01/17/07 - 10:36 AM EST
Another quarter has ended, and TheStreet.com Ratings has generated its top-200 list of open-end mutual funds for its quarterly guide, as of Dec. 31, 2006.
The purpose of this list is to suggest fund families that have many good funds to investors who are looking to minimize transaction costs. The families that capture the most spots on the list qualify as "ultra" fund families.
MFS, a unit of
Sun Life Financial(SLF Quote), placed the most funds in the top 200 for the third consecutive quarter, with 15 funds. In sole possession of second place is Putnam Funds with 14 funds on the list.
Tied for third place with 12 funds each are Franklin Templeton Investments, a unit of
Franklin Resources (BEN Quote), and Alliance Bernstein. Dreyfus, a unit of
Mellon Financial (MEL Quote), came in fourth with 10 funds.
Three more fund families tied for fifth place, with nine funds each making the list: AIM Investments, a unit of
Amvescap (AVZ Quote), Fidelity, and Gartmore.
TheStreet.com Ratings treats each share class of a fund as a separate fund. But if we eliminate the impact of multiple share classes, two fund families emerge from the pack: Putnam Funds, with seven unique funds, and Franklin Templeton, with five unique funds. Families tied for third place each with four unique funds include Alliance Bernstein, Dimensional Investment Group, Dreyfus, Fidelity, Gartmore, GMO Funds and MFS.
These are not the only fund families to consider if you want to minimize transaction costs while maximizing fund selection, however. In the quarter ending Dec. 31, 2006, 34 fund families had 100 or more funds rated by TheStreet.com Ratings. The list below ranks them by the percentage of their funds that produced risk-adjusted returns in the top 30% of our rankings.
| Fund Families With 100 or More Rated Funds |
| Fund Family Name |
# of Funds Rated |
Top 30% |
Middle 40% |
Bottom 30% |
| American Funds |
211 |
69.70% |
25.10% |
5.20% |
| Vanguard |
118 |
53.40% |
36.40% |
10.20% |
| Franklin Templeton Institutional Gr |
197 |
51.30% |
27.40% |
21.30% |
| Goldman Sachs |
129 |
48.80% |
24.80% |
26.40% |
| Allianz Global Investors Fund Manag |
117 |
47.90% |
13.70% |
38.50% |
| AIM Investments |
161 |
45.30% |
34.20% |
20.50% |
| T. Rowe Price |
113 |
45.10% |
42.50% |
12.40% |
| Ameriprise Financial |
120 |
41.70% |
29.20% |
29.20% |
| Hartford Funds, The |
116 |
38.80% |
40.50% |
20.70% |
| Principal Financial Group |
228 |
37.70% |
37.30% |
25.00% |
| Morgan Stanley |
184 |
37.50% |
35.30% |
27.20% |
| JPMorgan Funds |
238 |
37.00% |
40.80% |
22.30% |
| Dreyfus |
265 |
35.80% |
36.20% |
27.90% |
| Pioneer Investments |
100 |
35.00% |
24.00% |
41.00% |
| Gartmore |
150 |
34.00% |
33.30% |
32.70% |
| American Century Investments |
140 |
33.60% |
33.60% |
32.90% |
| Van Kampen |
144 |
32.60% |
42.40% |
25.00% |
| Evergreen Investments |
102 |
32.40% |
36.30% |
31.40% |
| DWS Scudder |
162 |
30.90% |
33.30% |
35.80% |
| Columbia Funds |
452 |
30.30% |
52.20% |
17.50% |
| MainStay Funds |
110 |
29.10% |
48.20% |
22.70% |
| MFS |
312 |
28.50% |
43.30% |
28.20% |
| Wells Fargo Advantage Funds |
202 |
28.20% |
46.50% |
25.20% |
| ING Investments, LLC |
310 |
27.70% |
39.40% |
32.90% |
| Putnam Funds |
388 |
26.00% |
55.90% |
18.00% |
| BlackRock |
222 |
25.20% |
42.30% |
32.40% |
| OppenheimerFunds |
147 |
25.20% |
32.00% |
42.90% |
| MassMutual Funds |
127 |
23.60% |
40.90% |
35.40% |
| Alliance Bernstein |
295 |
23.40% |
52.20% |
24.40% |
| Delaware Investments |
101 |
22.80% |
38.60% |
38.60% |
| Fidelity Investments |
551 |
21.80% |
54.30% |
24.00% |
| Pacific Life Group |
102 |
18.60% |
52.90% |
28.40% |
| John Hancock |
100 |
16.00% |
33.00% |
51.00% |
| Legg Mason |
130 |
8.50% |
44.60% |
46.90% |
| Source: TheStreet.com Ratings |
Our risk-adjusted return model awards overall investment grades from A-plus down to B-minus to funds in the top 30% of all open-end stocks funds, grades of C-plus, C and C-minus to the middle 40%, and grades from D-plus down to E-minus for the bottom 30%.
Not every fund in a family is assigned a grade, since we only rate those with a track record of at least three years.
For the second quarter in a row, American Funds topped the chart, with 69.7% of its 211 rated funds in the top 30% of all funds we rate.
Franklin Templeton and Vanguard also maintained the distinction of having more than half of their funds ranked in the top 30%, with
Goldman Sachs (GS Quote) slipping just below that level at a respectable 48.8%.
Among fund families with between 40 and 99 rated funds, GMO Funds came out on top, with 57.8% of its funds ranking in the top 30% of all the funds we rate, up from 55.6% in the third quarter. GMO Funds was previously categorized as a medium-sized fund family (those with 10-39 rated funds), but it got bumped up to the large fund family list because we now rate 45 of its funds, up from 36 at the end of September.
GMO pushed Ivy Funds, a unit of
Waddell & Reed (WDR Quote), out of the top spot among large fund families, even though it had a higher percentage of its funds ranked in the top 30% in the fourth quarter than in the third quarter: 53.0% vs. 47.1%.
| Fund Families With 40-99 Rated Funds |
| Fund Family Name |
# of Funds Rated |
Top 30% |
Middle 40% |
Bottom 30% |
| GMO Funds |
45 |
57.80% |
13.30% |
28.90% |
| Ivy Funds |
83 |
53.00% |
33.70% |
13.30% |
| Gabelli Funds |
75 |
36.00% |
34.70% |
29.30% |
| Russell Funds |
71 |
33.80% |
52.10% |
14.10% |
| STI Classic Funds |
54 |
33.30% |
33.30% |
33.30% |
| UBS Global Asset Management |
67 |
31.30% |
35.80% |
32.80% |
| Eaton Vance |
82 |
30.50% |
46.30% |
23.20% |
| Strategic Partners |
76 |
30.30% |
31.60% |
38.20% |
| Allegiant Funds |
40 |
27.50% |
25.00% |
47.50% |
| First American |
99 |
27.30% |
46.50% |
26.30% |
| SEI Financial Management Corp. |
44 |
25.00% |
63.60% |
11.40% |
| GE Investment |
49 |
24.50% |
49.00% |
26.50% |
| Credit Suisse Funds |
45 |
24.40% |
33.30% |
42.20% |
| Phoenix Funds |
82 |
24.40% |
29.30% |
46.30% |
| Lord Abbett |
80 |
23.80% |
47.50% |
28.80% |
| Old Mutual Funds |
62 |
22.60% |
16.10% |
61.30% |
| Rydex Funds |
83 |
20.50% |
24.10% |
55.40% |
| JennisonDryden |
80 |
20.00% |
57.50% |
22.50% |
| Waddell & Reed |
55 |
20.00% |
30.90% |
49.10% |
| Federated Investors |
69 |
18.80% |
49.30% |
31.90% |
| Janus Fund |
55 |
18.20% |
49.10% |
32.70% |
| AXA Enterprise Funds |
84 |
17.90% |
40.50% |
41.70% |
| BB&T Funds |
46 |
17.40% |
56.50% |
26.10% |
| MTB Funds |
43 |
16.30% |
18.60% |
65.10% |
| Munder Funds |
63 |
15.90% |
55.60% |
28.60% |
| Seligman Group |
98 |
15.30% |
55.10% |
29.60% |
| ProFunds |
76 |
14.50% |
31.60% |
53.90% |
| Fifth Third Funds |
85 |
14.10% |
43.50% |
42.40% |
| SunAmerica |
84 |
13.10% |
28.60% |
58.30% |
| PIMCO Funds |
80 |
11.30% |
51.30% |
37.50% |
| IDEX Funds |
69 |
8.70% |
49.30% |
42.00% |
| IXIS Advisor Funds |
40 |
7.50% |
62.50% |
30.00% |
| Source: TheStreet.com Ratings |
Investors don't necessarily have to stay within a single fund family to keep transaction costs down, however. Brokerage accounts also provide a lot of flexibility to buy and sell funds, assuming the trading commissions are reasonable. There are 73 fund families that have between 10 and 39 ranked funds; the 20 best are listed below. Jumping from fifth place up to first, Thornburg Funds has 15 of its 17 funds in the top 30% and none in the bottom 30%.
| The 20 Best Fund Families With 10-39 Rated Funds |
| Fund Family Name |
# of Funds Rated |
Top 30% |
Middle 40% |
Bottom 30% |
| Thornburg Funds |
17 |
88.20% |
11.80% |
0.00% |
| Dimensional Investment Group |
25 |
80.00% |
16.00% |
4.00% |
| Diamond Trusts |
11 |
72.70% |
27.30% |
0.00% |
| Lazard Funds |
13 |
69.20% |
15.40% |
15.40% |
| Vantagepoint Funds |
19 |
68.40% |
26.30% |
5.30% |
| American AAdvantage |
25 |
68.00% |
24.00% |
8.00% |
| TIAA-CREF Funds |
27 |
66.70% |
25.90% |
7.40% |
| RBB Funds |
10 |
60.00% |
20.00% |
20.00% |
| Oakmark |
12 |
58.30% |
41.70% |
0.00% |
| Davis Funds |
26 |
57.70% |
42.30% |
0.00% |
| Hotchkis & Wiley |
14 |
57.10% |
14.30% |
28.60% |
| Harbor Funds |
24 |
54.20% |
16.70% |
29.20% |
| Nicholas-Applegate Mutual Funds |
20 |
50.00% |
45.00% |
5.00% |
| Nuveen Mutual Funds |
24 |
50.00% |
33.30% |
16.70% |
| Forward Funds, Inc. |
10 |
50.00% |
30.00% |
20.00% |
| Kinetics Mutual Funds, Inc. |
10 |
50.00% |
0.00% |
50.00% |
| Royce Funds |
34 |
47.10% |
47.10% |
5.90% |
| First Eagle |
15 |
46.70% |
33.30% |
20.00% |
| Barclays Global |
11 |
45.50% |
54.50% |
0.00% |
| Optimum Funds |
20 |
45.00% |
35.00% |
20.00% |
| Source: TheStreet.com Ratings |
Of the 300 fund families that have nine or fewer funds, the Quantitative Group of Funds leads the pack with all seven of its funds that we rate in the top 30%. Third Avenue and Weitz Series each have all four of their four rated funds in the top 30%.
