Hybrid Funds Turn in Solid First-Quarter Results

The average hybrid fund lost around 5% to 6% for the quarter, which is by no means disastrous -- especially when some categories of stock funds averaged a loss of anywhere between 10% and 16% for the first quarter.

The allocation of assets under management to the debt markets, along with Federal Reserve intervention to stabilize the credit markets, put these funds' performance numbers right in the middle between pure stock funds (which performed worse) and the pure bond funds (which performed better).

Average of Three-Month Returns (%)
OBJECTIVE	Q1 Average Return
Balanced - Global	-5.17
Balanced - Domestic	-5.54
Asset Allocation - Global	-5.86
Asset Allocation - Domestic	-6.15
Convertible	-6.26
Grand Total	-6.01

On an individual basis, below are the best of the hybrid funds.

As we move into the second quarter, there are worse places you could put your money than in hybrid funds, but given that it is likely that the performance of the bond market will hold up hybrid fund results, it would be more prudent to seek out a good pure bond fund play if investors are of the opinion that the stock market and economy will continue to be weak in the coming months, and the Fed will continue to bail out the credit markets.

Certainly, Friday's earnings result from General Electric(GE - Cramer's Take - Stockpickr) suggests that credit issues are not behind us yet.

Best Hybrid Funds
NAME	TICKER	TSCR Grade	1 Month Return	3 Month Return	OBJECTIVE
Permanent Portfolio Fund	PRPFX	A+	-0.98	3.83	Asset Allocation - Domestic
GMO Alpha Only Fund III	GGHEX	A+	-0.09	1.46	Asset Allocation - Global
DWS Target 2014 Fd A	KRFEX	B+	0.52	2.65	Balanced - Domestic
Fidelity Global Balanced Fund	FGBLX	B+	0.6	-3.6	Balanced - Global
Victory Invt Grade Conv A	SBFCX	C+	-2.31	-4.09	Convertible