These Funds Survived the Great Depression
Wouldn't it be nice to own a fund that had survived all the way since before the Great Depression? Wouldn't you think it might do pretty well during this time of volatility?
Things are different this time, of course -- or so they say.
In investing, things are almost always different, which keeps us on our toes and prevents the trend followers from inheriting the universe.
But at the same time, seldom are things overwhelmingly and permanently different from anything that has happened before.The housing industry is teetering on the brink of collapse. Subprime loans are steering the financial industry toward terra incognita. The tightening of credit and soaring energy prices are driving middle America into bankruptcy. It might be comforting to know that some investment funds have survived and prospered through many "different" environments over the years. Sponsors, managers and even their names have changed. Some have experienced mergers and investment objective redirections. But the funds have endured "different" environments as extreme as the Great Depression of the 1930s, the World War that followed and the subsequent Cold War, not to mention the Internet boom and bust and myriad other cyclical events. How are these veterans of the fund world doing? Not badly at all. Some funds that debuted during the "Roaring Twenties" still haven't lost their stamina, as can be seen in the accompany table. The list contains nine open-end mutual funds and six closed-end funds that were initially offered to the public during the 1920s. The funds are listed in ascending order of initial public offering date in separate listings for the open-end and closed-end funds. Two of the 15 funds in the table have grades in the "A" range from TheStreet.com Ratings: Vanguard Wellington (VWELX) and CGM Mutual Fund (LOMMX). Those, along with four carrying marks in the "B" range, qualify as "buy" recommendations. The "B"-range funds are MFS Mass Investors Trust (MITTX), General American Investors (GAM), Petroleum and Resources (PEO) and Central Securities (CET). Six others, with grades in the "C" range, are rated as "hold" recommendations by TheStreet.com Ratings. Those are Philadelphia Fund (PHILX), Pioneer Fund (PIODX), DWS Core Plus Income (SCSBX), Third Canadian General (on the Toronto exchange), Tri-Continental (TY) and Adams Express (ADX). Only three of the 15 funds were graded in the "D" range, which equates with "sell" recommendations. Those are Putnam Investors Fund (PINVX), Century Shares Trust Fund (CENSX) and DWS Growth & Income (SCDGX). None fell into the "E" range. With one exception, all the funds on the list were born prior to the beginning of the 1929 stock market crash. The one "youngster" in the group, the CGM Mutual Fund, didn't check into the world until a few weeks into the '29 implosion. But LOMMX sure hasn't been acting like a 78-year-old. It has rewarded its investors with a sizzling average annual total return of 19.41% over the past five years. Over the 12 months ended Jan. 31, 2007, a period when the S&P 500 skidded lower, it sprinted ahead by 28.46%. LOMMX's largest holdings are Schlumberger (SLB) and Brazilian Petroleum (PBR). The other veteran funds have also been holding their own. Five of the eight open-end equity funds on the list have outperformed the S&P over the past 10 years, the same number that have outpaced that benchmark over the last five years and the latest 12 months. Four of the eight open-end equity funds have turned in better records than the S&P over each of the three time periods (12 months, five years and 10 years) listed in the table. Five of the six closed-end funds outperformed the S&P for the latest 10-year period, with four of the six besting the gauge over the past five years and the same number exceeding the S&P's return over the past 12 months. The average of the six closed-end funds is three to five percentage points better than the S&P's return for each of the three time periods. These septuagenarian and octogenarian funds are obviously not letting their investment performances wither with age. And no one can deny that they have stood the test of time.
|FUNDS THAT HAVE SEEN IT ALL OVER MORE THAN THREE QUARTERS OF A CENTURY|
|NAME, TICKER & TheStreet.com RATINGS GRADE||INITIAL PUBLIC OFFERING DATE||INVESTMENT OBJECTIVE||12-MO. TOTAL RET'N (%)||5-YR. ANN'L RET'N (%)||10-YR. ANN'L RET'N (%)|
|OPEN-END MUTUAL FUNDS|
|Philadelphia Fund (PHILX) C-||12/31/1923||Growth & Income||-0.58||11.62||5.84|
|MFS Mass Investors Trust A (MITTX) B-||7/15/1924||Growth & Income||3.05||12.29||3.98|
|Putnam Investors Fund A (PINVX) D-||12/1/1925||Growth - Domestic||-14.56||9.84||2.35|
|Pioneer Fund A (PIODX) C-||2/13/1928||Growth & Income||-2.59||12.33||5.96|
|Century Shares Trust Fd (CENSX) D- (1)(3)||3/15/1928||Financial Services||-0.83||10.86||6.34|
|DWS Core Plus Income S (SCSBX) C- (1)(2)||4/24/1928||Gen Bd - Inv Grade||5.12||4.48||4.90|
|DWS Growth & Income S (SCDGX) D- (1)||5/31/1929||Growth & Income||-6.17||10.28||1.56|
|Vanguard Wellington Inv (VWELX) A+ (1)(2)||7/1/1929||Balanced - Domestic||4.54||12.14||7.97|
|CGM Mutual Fund (LOMMX) A- (1)||11/05/1929||Balanced - Domestic||28.46||19.41||7.33|
|AVG. OF ABOVE OPEN-END EQUITY FUNDS||1.42||12.35||5.17|
|General American Investors (GAM) B||1/30/1927||Growth - Domestic||2.02||14.36||12.67|
|Third Canadian General Invst Tr (T.THD) C||2/3/1928||Non-US Equity||-10.34||26.79||10.96|
|Tri-Continental Corporation (TY) C+||1/12/1929||Equity Income||-4.85||11.69||3.86|
|Petroleum and Resources Corp. (PEO) B+||1/30/1929||Energy/Natural Res||18.07||21.61||11.35|
|Adams Express Company (ADX) C+||10/1/1929||Equity Income||1.28||11.51||5.39|
|Central Securities (CET) B+||10/1/1929||Growth - Domestic||1.80||18.16||6.61|
|AVG. OF ABOVE CLOSED-END FUNDS||1.33||17.35||8.47|
|S&P 500 Composite Total Return||-2.31||12.03||5.14|
|Lehman Brothers Aggregate Bond||8.80||4.75||6.01|
|(1) No-load fund. |
(2) Closed to new investors.
(3) Institutional fund with minimum initial investment of more than $25,000.
Source: TheStreet.com Ratings -- Data as of 1/31/2007.
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