The Big Screen: Mid-Cap Growth Funds

 

Some 90% of the mid-cap funds we sifted didn't make our cut, but those that did followed a range of strategies to above-average gains.

In running the broker-sold (CVGRX)Calamos Growth fund since its 1990 launch, John Calamos has used quantitative models to dig up small- and mid-cap stocks with solid growth prospects and attractive price tags. He has quietly topped his average peer in each of the past six years, and his fund tops all other mid-cap growth offerings over the past five and 10 years.

The team of managers behind the no-load (VALSX)Value Line Special Situations fund uses that firm's proprietary ratings systems and its own research to pick stocks that are underappreciated due to industry or company changes. That's led to a sprawling 300-stock portfolio, but the fund has also beaten its average competitor in each of the past six years.

Saul Pannell, manager of the (ITHAX)Hartford Capital Appreciation fund since its 1996 start, looks near and far for stocks in which he sees a 25% gain due to solid earnings, modest valuations or both. He has topped 97% of his peers and the S&P 500 over the past five years, but has less than half his fund in mid-cap stocks. That should discourage those looking for a pure mid-cap investment.

The broker-sold (PEEAX)Prudential US Emerging Growth and the no-load (ALMRX)Alger MidCap funds tend to stash half their assets in health care and tech stocks, and aren't shy about trading among them, which might scare off some tax-conscious types. You can't say that tactic hasn't worked with these funds, however, as both have topped most of their peers over the past five years. Susan Hirsch has run the Prudential fund since its 1996 launch, while Dan Chung took over the Alger portfolio in the wake of September's terrorist attacks.


Mid-Cap Growth All-Stars
Mid-Cap Growth fund Five-Year Return One-Year Return
Calamos Growth 27% -7.7%
Hartford Capital Appreciation 21.9 -6.9
Alger MidCap 21.1 -6.2
Value Line Special Situations 16.3 -17.7
Prudential US Emerging Growth 14.7 -20.3
Average Peer 8.5 -21.3
S&P 500 10.7 -12
Source: Morningstar. Annualized returns through Dec. 31.

Two no-load, mid-cap funds that met our criteria, but barely missed the top-five, are the (RPMGX)T. Rowe Price Mid-Cap Growth and the (RSMOX)RS MidCap Opportunities funds.

Both funds have topped their average peer over the past one, three and five years, with below-average volatility, thanks to price-conscious approaches. In running the T. Rowe Price fund since its 1992 start, Brian Berghuis has spread his bets widely, shopping for stocks with solid earnings growth and a reasonable price tag. John Wallace, manager of RS MidCap Opportunities since its 1995 launch, also pays strict attention to valuations and is quick to dump positions when they sag or hit his price targets.

Click on these links to check out the other funds we dug up:

  • Large-cap growth funds

  • Small-cap growth funds

  • >To order reprints of this article, click here: Reprints

    Ian McDonald writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to imcdonald@thestreet.com, but he cannot give specific financial advice.

    TheStreet Premium Services    For Personal Service: 877-471-2967

    Jim Cramer
    Jim Cramer's Action Alerts PLUS:
    Trade right alongside a Wall Street pro — enjoy access to his Charitable Trust portfolio and be sent trade alerts BEFORE he makes a move. Learn More
    New: ETF Profits
    ETF Profits:
    Get money-making ideas from the hottest investment vehicle on the planet. Our experts show you how to play various ETF sectors to help pump-up your portfolio. Learn More
    OptionsProfits
    OptionsProfits:
    Get 50+ trade ideas a week from the industry's top options experts. Plus — exclusive commentary on market trends and essential trading tools. Learn More
    Doug Kass
    Real Money:
    Our team of professional Wall Street Pros — including Jim Cramer, Doug Kass, and Nicholas Vardy — delivers intelligent analysis, timely trade ideas, and colorful commentary. Learn More
    Stocks Under $10
    Stocks Under $10:
    Break into the market with small- and mid-cap stocks... all $10 or less! David Peltier tells you exactly which low-priced stocks he's buying and selling. Learn More
    To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
    blog comments powered by Disqus
    Dow Jones S&P 500 NASDAQ 10-Year Note
    12,890.46 1,351.95 2,927.23 20.47
    Oil *
    118.75
    UP
    6.51
    UP
    1.99
    UP
    11.37
    UP
    0.72
    10 Yr
    2.05%
    SPDR Gold
    168.02
    +0.05%
    +0.15%
    +0.39%
    +3.65%
    Data delayed 20 minutes

    Top Stories and Tools

    Brokerage Partners

    After the Bell

    Before the Bell

    Booyah! Newsletter

    ETF Daily

    Midday Bell

    TheStreet Top 10 Stories

    Winners & Losers

    We respect your privacy.
    Podcasts

    Connect with TheStreet