Stock Funds Besting S&P

It was 17 years ago that the (LMVTX Quote)Legg Mason Value Trust (LMVTX), with legendary fund manager Bill Miller at the helm, took the first steps in a journey that would produce 15 consecutive years of annual performance numbers of greater magnitude than those of the S&P 500 total-return index.

It made the financial headlines in early 2001, when Miller had bested the S&P for the 10th consecutive year. Now with so many more funds in existence than there were in early 1991, you might expect there would be more that had reached this milestone.

With one highly debatable exception that we will discuss shortly, it won't happen before the final bell of 2008.

A search of TheStreet.com Ratings' database produced 36 open-end equity and hybrid funds that have now outperformed the S&P total-return gauge for each of the past nine years. These included periods during the 2000-02 bear market when many of the funds lost money, albeit less than the S&P.

In keeping with recent investment fashions, it is not surprising that the list is dominated by 15 funds that focus on non-U.S. equities. Nor should it be surprising that eight global equity funds -- meaning those that invest in international as well as U.S. stocks -- also appear on the list.

Equally predictable, considering the relentless upward march in the price of crude oil, is the appearance of five energy/natural resources funds on the list.

The fund that arguably came closest to achieving a decade of S&P-topping years is (ANWPX Quote)American Funds New Perspective A (ANWPX). Its respectable 28.46% return in calendar year 1998 fell just shy of the S&P's total return by a razor-thin 11 basis points, or 0.11 percentage point.

Then, over the next nine years through the end of 2007, ANWPX outperformed the S&P by reasonably comfortable margins.

New Perspective's largest holdings are Microsoft(MSFT Quote) and Roche Holdings.

But over the years, American Funds introduced additional classes of its New Perspective fund. These included the (RNPFX Quote)American Funds New Perspective R5 (RNPFX) class, which debuted in May 2002. The class is targeted for large retirement plans and therefore has an extremely slim expense ratio.

The performance of this share class was backdated for a number of years prior to its initial offering date, using the results from the older "A" class, but with the R2 class' slimmer expense ratio applied.

Known as "prepended performance" in the fund industry, this backdating of results is approved by regulatory bodies -- with close supervision -- because it provides additional historical perspective to investors.

Thanks to its ultralow expense ration, the prepended performance of RNPFX for calendar 1998 is 24 basis points better than the total-return S&P's 28.57%. The R5 class's performance for every subsequent calendar year, like that of its "A" shares sibling, was comfortably better than the S&P.

So counting its prepended performance, the American Funds New Perspective R5 fund has outperformed the S&P total-return index for 10 consecutive calendar years.

The size of the asterisk that should be attached to the record of RNPFX's achievement is a matter of debate.

Potential Bill Millers: Nine Consecutive Years Beating the S&P 500 Total Return Index
NAME, TICKER & TheStreet.com RATINGS GRADE	OBJECTIVE	MIN INIT. INVEST- MENT	SALES CHG TYPE	TOTAL EXPENSE RATIO (%)	1999-2007 ANN'L RET'N (%)
AIM Capital Development A (ACDAX) C	Mid Cap	1,000	Front Load	1.27	9.21
American Funds Cap Wld Gr&Inc A (CWGIX) A+	Global Equity	250	Front Load	0.73	13.48
American Funds Fundamentl Invs A (ANCFX) B+	Growth & Income	250	Front Load	0.61	9.20
American Funds New Perspective A (ANWPX) A	Global Equity	250	Front Load	0.74	10.31
BlackRock Glb Allocation Inv A (MDLOX) A+	Asset Allocation - Global	1,000	Front Load	1.17	13.01
BlackRock Global Small Cap Inv A (MDGCX) C	Global Equity	1,000	Front Load	1.42	18.19
Columbia Greater China A (NGCAX) B	Non-US Equity	2,500	Front Load	1.75	23.70
DFA International Small Company (DFISX) B+	Non-US Equity	2,000,000	No Load	0.55	14.99
Fidelity Adv Energy A (FANAX) C	Sector - Energy/Natural Res	2,500	Front Load	1.19	20.38
Fidelity Select Natural Resources (FNARX) B+	Sector - Energy/Natural Res	2,500	No Load	0.93	21.83
Fidelity Worldwide Fund (FWWFX) B+	Non-US Equity	2,500	No Load	1.08	9.42
First Eagle Overseas Fund A (SGOVX) B+	Non-US Equity	2,500	Front Load	1.14	18.06
GMO Foreign Fund II (GMFRX) A	Non-US Equity	10,000,000	No Load	0.87	12.01
GMO Foreign Small Companies III (GMFSX) A+	Non-US Equity	10,000,000	No Load	0.95	18.83
GMO International Eq Alloc III (GIEAX) B+	Asset Allocation - Global	10,000,000	Front Load	0.77	15.31
Ivy Fund-Global Nat Resource A (IGNAX) B+	Sector - Energy/Natural Res	500	Front Load	1.29	26.21
JennDry Jennison Nat Resources A (PGNAX) C+	Sector - Energy/Natural Res	2,500	Front Load	1.24	28.58
JPMorgan Small Cap Growth A (PGSGX) D	Small Cap	1,000	Front Load	1.36	9.47
Lord Abbett Sec Tr-Alpha Stratg A (ALFAX) B	Global Equity	1,000	Front Load	1.79	9.27
Manning & Napier Pro-Blend Max Term (EXHAX) B	Asset Allocation - Domestic	2,000	No Load	1.16	11.33
Manning & Napier World Opprty Fd A (EXWAX) B+	Non-US Equity	2,000	No Load	1.16	16.25
Matthews Asian Growth & Income Fd (MACSX) A+	Non-US Equity	2,500	No Load	1.20	21.14
MFS Intl New Discovery A (MIDAX) B+	Non-US Equity	1,000	Front Load	1.55	18.69
Mutual Discovery A (TEDIX) A+	Global Equity	1,000	Front Load	1.36	13.73
Mutual European A (TEMIX) A+	Non-US Equity	1,000	Front Load	1.34	16.88
Oppenheimer Developing Mkts A (ODMAX) B-	Emerging Market Equity	50,000	Front Load	1.37	26.56
Pru Target Growth Alloc A (PHGAX) C+	Growth - Domestic	2,500	Front Load	1.28	7.15
T. Rowe Price New Era (PRNEX) A-	Sector - Energy/Natural Res	2,500	No Load	0.64	19.16
T. Rowe Price Spectrum Growth (PRSGX) B+	Growth & Income	2,500	No Load	0.79	7.49
Templeton Foreign A (TEMFX) C+	Non-US Equity	1,000	Front Load	1.16	11.69
Templeton Foreign Smaller Co A (FINEX) C	Non-US Equity	1,000	Front Load	1.50	12.35
Templeton Global Opportunities A (TEGOX) A+	Global Equity	1,000	Front Load	1.40	10.03
Templeton World A (TEMWX) C+	Global Equity	1,000	Front Load	1.06	9.39
Thornburg Intl Value A (TGVAX) A	Non-US Equity	5,000	Front Load	1.33	16.69
UMB Scout Internl Fund (UMBWX) A	Non-US Equity	1,000	No Load	0.97	10.37
Vanguard Global Equity Fund (VHGEX) A	Global Equity	3,000	No Load	0.72	13.23
GROUP AVERAGE				1.13	15.10
S&P 500 TOTAL-RETURN INDEX					3.65
Data as of 12/31/2007 Source: TheStreet.com Ratings & Bloomberg.

Phantom Performance New Perspective Funds' R5 Share Class beat the S&P for the past 10 years.
	American Funds New Perspective R5 (RNPFX) *	American Funds New Perspective A (ANWPX)	S&P 500 Total Ret'n
CALENDAR 1998	28.81	28.46	28.57
CALENDAR 1999	40.38	40.07	21.05
CALENDAR 2000	-7.04	-7.24	-9.11
CALENDAR 2001	-8.10	-8.30	-11.88
CALENDAR 2002	-15.80	-16.05	-22.10
CALENDAR 2003	37.10	36.76	28.69
CALENDAR 2004	14.55	14.27	10.87
CALENDAR 2005	11.53	11.28	4.89
CALENDAR 2006	20.21	19.87	15.80
CALENDAR 2007	16.30	16.04	5.47
* "Prepend" performance for periods prior to first public offering date of 5/15/2002. Data as of 12/31/2007. Source: TheStreet.com Ratings and Bloomberg.