The Big Screen: Small- and Mid-Cap Growth Funds
Growth funds are showing signs of life again, but choosing among the ragged masses is hardly easy.
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But with most growth funds having lost a quarter or more of their value over the past year, it might be tough to find some decent choices. Today, the Big Screen sifts the mid- and small-cap growth-fund bins to single out a short list of survivors. It updates our past effort and will be added to our Diversification Tool Box -- a blueprint for a diversified stock-fund portfolio with a list of decent funds in each style.
In each category we yanked out any fund that didn't beat the category average over the past one, three and five years, and those where a new manager took the reins in the past three years. Then we pulled out funds that are closed to new investors and those with above-average expenses and a minimum investment north of $10,000. Finally, we ranked the funds that made our cut by their annualized returns over the past five years. Let's first check out the mid-cap funds, which focus on stocks with market caps
between $1.4 billion and $8.8 billion.
You might expect to find conservative types on our list, but that's not necessarily the case. At the top of our list you'll find two aggressive funds, the broker-sold (CVGRX)Calamos Growth fund and the no-load (BRAGX)Bridgeway Aggressive Growth fund, which trade rapidly among stocks they dig up using quantitative screens.
John Calamos, lead manager of his eponymous fund since its 1990 launch, and John Montgomery, manager of the Bridgeway fund since its 1994 start, crunch data to find stocks of companies they think are poised for above-average earnings growth and share appreciation. Each fund sports a turnover ratio above 200%, meaning the portfolio changes over twice each year, and each tops more than 70% of its peers over the past one, three and five years, according to Chicago fund researcher Morningstar.
| Battered Mid-Cap Growth All-Stars |
||
| Mid-Cap Growth Fund | 5-Year Return | 1-Year Return |
| (CVGRX)Calamos Growth | 26.3% | -18.9% |
| (BRAGX)Bridgeway Aggressive Growth | 23.8 | -24.1 |
| (ITHAX)Hartford Capital Appreciation | 22.2 | -14.4 |
| (VALSX)Value Line Special Situations | 15.3 | -30.6 |
| (OSGIX)One Group Mid Cap Growth | 15 | -26.4 |
| (OTCAX)MFS Mid-Cap Growth | 14.5 | -34.1 |
| (CEGCX)Centura Mid Cap Equity | 14.3 | -10.2 |
| (SECUX)Security Ultra | 14.3 | -29.2 |
| (LMGAX)Lord Abbett Growth Opportunities | 14.2 | -18.7 |
| (RPMGX)T. Rowe Price Mid-Cap Growth | 12.2 | -12.9 |
| Average Peer | 6.1 | -38.2 |
| S&P 500 | 10 | -25 |
| Source: Morningstar. Returns through Oct. 31. | ||
| Battered Small-Cap Growth All-Stars |
||
| Small-Cap Growth Fund | 5-Year Return | 1-Year Return |
| (ARPAX)ARK Small Cap Equity | 19.3 | -14.8 |
| (FUSMX)Fremont U.S. Micro-Cap | 19.1 | -21.1 |
| (WAAEX)Wasatch Small Cap Growth | 18.5 | 4 |
| (BCSIX)Brown Capital Management Small Company | 16.4 | -8.8 |
| (SAGWX)Sentinel Small Company | 15.5 | -2.7 |
| (ACRNX)Liberty Acorn | 13.5 | -1.9 |
| (BGRFX)Baron Growth | 13.4 | 1.1 |
| (MERDX)Meridian Growth | 12.3 | 2.4 |
| (KASMX)Kayne Anderson Rudnick Small Mid Cap | 12.2 | 3.2 |
| (HSPGX)Emerald Growth | 11.1 | -9.5 |
| Average Peer | 6.3 | -26.8 |
| S&P 500 | 10 | -25 |
| Source: Morningstar. Returns through Oct. 31. | ||
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