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Ultra Funds: The Best of the Best

Editor's note: As a special feature for April, TheStreet.com is offering a series reviewing the first-quarter performance of mutual funds and ETFs. This is the fourth installment.

As we close the books on the first quarter of 2007, TheStreet.com Ratings looks back at which fund families performed the best -- what we like to call "ultra" fund families.

There are two ways that a fund family can earn the designation of ultra fund family. One, the fund company can be one of the few that has the most funds on our quarterly top-200 list of open-end funds. Two, the fund can have a greater percentage of its funds ranked in the top 30% of all open-end funds compared with other fund families of similar size.

This quarter, Franklin Templeton Investments, a unit of Franklin Resources (BEN), placed 16 funds in our top 200. This knocked MFS, a unit of Sun Life Financial (SLF) down to second place with 15 funds and Putnam Funds down to third from second with 13 funds.

Also doing well were AIM Investments, a unit of Amvescap (AVZ), with 11 funds, and Alliance Bernstein with 10 funds. Each share class is considered by TheStreet.com Ratings as a separate fund.

Once the effect of multiple share classes is taken away, two additional families rise to the top. GMO Funds and Dimensional Investment Group join Franklin Templeton Investments with six unique funds. Putnam Funds and AIM Investments tied for second place with five unique funds, and MFS came in third with four.

As of March 31, 2007, there remain just 34 fund companies with 100 or more open-end funds rated on a risk-adjusted return basis by TheStreet.com Ratings. Being one of the top-five fund families on each of the lists below is the other way to be considered an ultra fund family.

Top 30% funds earned overall investment grades of A-plus down to B-minus. Those ranked in the middle 40% had grades of C-plus, C and C-minus. And D-plus or lower make up the bottom 30%.


Top Fund Families With 100 or More Rated Funds
Fund Family Name No. of Funds Rated Top 30% Middle 40% Bottom 30%
American Funds 211 64.50% 29.90% 5.70%
Franklin Templeton 197 51.80% 28.90% 19.30%
Vanguard 126 51.60% 37.30% 11.10%
T. Rowe Price 117 48.70% 38.50% 12.80%
AIM Investments 161 48.40% 26.10% 25.50%
Goldman Sachs 129 47.30% 23.30% 29.50%
Allianz Global Investors Fund Manag 117 47.00% 23.10% 29.90%
RiverSource Investments 164 38.40% 36.00% 25.60%
Columbia Funds 458 38.20% 48.50% 13.30%
Principal Financial Group 278 38.10% 39.20% 22.70%
Morgan Stanley 183 37.70% 35.50% 26.80%
JPMorgan Funds 238 35.70% 41.20% 23.10%
Dreyfus 282 35.10% 30.10% 34.80%
American Century Investments 146 34.90% 33.60% 31.50%
Hartford Funds, The 149 34.90% 45.00% 20.10%
MFS 297 33.70% 39.40% 26.90%
Gartmore 151 33.10% 34.40% 32.50%
Van Kampen 145 32.40% 45.50% 22.10%
Evergreen Investments 102 30.40% 34.30% 35.30%
MainStay Funds 110 30.00% 45.50% 24.50%
BlackRock 227 29.10% 40.10% 30.80%
ING Investments, LLC 309 28.80% 37.50% 33.70%
OppenheimerFunds 151 28.50% 30.50% 41.10%
Fidelity 591 27.60% 49.70% 22.70%
DWS Scudder 162 27.20% 33.30% 39.50%
Wells Fargo Advantage Funds 213 26.30% 47.90% 25.80%
Alliance Bernstein 305 24.30% 55.70% 20.00%
Putnam Funds 383 21.40% 62.70% 15.90%
Pacific Life Funds 117 20.50% 55.60% 23.90%
MassMutual Funds 127 20.50% 48.80% 30.70%
Delaware Investments 101 19.80% 42.60% 37.60%
John Hancock 100 18.00% 39.00% 43.00%
Rydex Funds 117 15.40% 31.60% 53.00%
Legg Mason 109 10.10% 30.30% 59.60%
Source: TheStreet.com Ratings

American Funds holds the top spot on the list above for the third consecutive quarter. Of the 211 American funds we rate, 64.5% of them are ranked in the top 30%. Franklin Templeton, with 51.8% in the top 30%, narrowly edged out Vanguard's 51.6%, reversing their second- and third-place order from last quarter. T.Rowe Price (TROW) climbed from seventh place at year-end to fourth, and AIM rose from sixth to fifth.

Top Fund Families With 40 to 99 Rated Funds
Fund Family Name No. of Funds Rated Top 30% Middle 40% Bottom 30%
Ivy Funds 83 56.60% 32.50% 10.80%
Gabelli Funds 75 50.70% 16.00% 33.30%
GMO Funds 47 42.60% 38.30% 19.10%
Pioneer Investments 93 37.60% 24.70% 37.60%
Russell Funds 71 33.80% 49.30% 16.90%
STI Classic Funds 57 33.30% 28.10% 38.60%
Eaton Vance 82 31.70% 48.80% 19.50%
Lord Abbett 80 28.80% 46.30% 25.00%
JennisonDryden 92 27.20% 53.30% 19.60%
SEI Financial Management Corp. 44 25.00% 65.90% 9.10%
Source: TheStreet.com Ratings

Ivy Funds, a unit of Waddell & Reed (WDR) regained the top spot on the 40-to-99-funds list, as GMO Funds, slipped to third place behind Gabelli Funds.

The 10 Best Fund Families With 10-39 Rated Funds
Fund Family Name No. of Funds Rated Top 30% Middle 40% Bottom 30%
Thornburg Funds 17 100.00% 0.00% 0.00%
Lazard Funds 11 81.80% 0.00% 18.20%
Dimensional Investment Group 25 80.00% 16.00% 4.00%
Diamond Trusts 11 63.60% 27.30% 9.10%
Vantagepoint Funds 19 63.20% 31.60% 5.30%
Pacific Capital 25 60.00% 16.00% 24.00%
Forward Funds, Inc. 10 60.00% 40.00% 0.00%
Hotchkis & Wiley 14 57.10% 14.30% 28.60%
American AAdvantage 25 52.00% 40.00% 8.00%
Oakmark 12 50.00% 33.30% 16.70%
Source: TheStreet.com Ratings

Of the 71 fund families with between 10 and 39 rated funds, Thornburg Funds retained the top ranking. Impressively, all 17 of its rated funds rank in the top 30%. Lazard Funds moved up two spots from a fourth-place finish in the fourth quarter to second place. This pushed Dimensional Investment Group down from second to third place.

We track 303 additional fund families that have fewer than 10 rated funds. Third Avenue takes the No. 1 spot with all four of its rated funds in the top 30%. Dodge & Cox and Longleaf Partners each placed all three of their rated funds in the top 30%.

Kevin Baker became the senior financial analyst for TSC Ratings upon the August 2006 acquisition of Weiss Ratings by TheStreet.com, covering mutual funds. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.

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