Hybrid Funds Stand Out in Year-to-Date Returns
They make up only a small fraction of the broad "equity" category of open-end mutual funds. Yet "hybrid" funds that blend equity and fixed-income investments in their portfolios placed five members on the accompanying list of the 10 equity funds with the highest year-to-date marks from TheStreet.com Ratings.
Every fund in the table sports an A+ grade.
Three of the hybrids on the list are of the domestic "asset allocation" species that vary their equity/fixed-income mixes to optimize returns according to the outlooks of their respective managers.
One other fund on the list does the same, with the added option of doing so with a worldwide scope.The remaining hybrid fund, the John Hancock Balanced Fund (SVBAX), tends to maintain a steadier stock/bond mix that's generally tilted in favor of equities. SVBAX's largest holdings are Alcoa (AA) and Archer Daniels Midland (ADM). Of the remaining funds in the table, two are broadly classified in domestic growth category. However, the second word in the name of the Pinnacle Value Fund (PVFIX) suggests a generally conservative investment posture. Although its stated objective is long-term capital appreciation, PVFIX has edged toward an asset allocation approach by recently holding cash and equivalents equal to more than 60% of its portfolio value. Its largest securities holdings are Argan (AGX) and Conrad Industries (CNRD). The other member of the elite group listed broadly as a domestic growth fund has been achieving its portfolio gains using the unconventional methodology suggest by its name: The Prudent Bear Fund (BEARX). Of the 10 funds on the list, BEARX's 5.42% appreciation for the first three months of the year tops the list, while its 12-month gain or 16.50% outscored all but one of the others. Two of the funds on the list are broadly classified as equity income funds. One of them, the TFS Market Neutral Fund (TFSMX), is another unconventional fund -- appropriate for these uncommon times -- whose investment strategy is given away by its name. The fund's portfolio of long and short positions produced a return of 7.08% for the 12 months ended March 31, a period when the S&P 500 total-return index skidded 5.08%. TSFMX's setback of 1.52% during the first quarter of 2008 was relatively mild when compared with the S&P's decline of 9.45% for the same period.
|TheStreet.com Ratings Top-Rated Equity & Hybrid Mutual Funds|
|NAME, TICKER & TheStreet.com RATINGS GRADE||INVESTMENT OBJECTIVE||3-MO. TOTAL RETR'N (%)||12-MO. TOTAL RET'N (%)||3-YR. ANN'L RET'N (%)||SALES CHARGE TYPE|
|BB&T Equity Income A (BAEIX) A+||Equity Income||-3.12||2.19||12.25||Front Load|
|BlackRock Glb Allocation Inv A (MDLOX) A+||Asset Allocation - Global||-1.77||12.36||13.36||Front Load|
|Fidelity Adv Consumer Staples A (FDAGX) A+||Growth - Domestic||-2.54||12.81||14.27||Front Load|
|Ivy Fund-Asset Strategy A (WASAX) A+||Asset Allocation - Domestic||-2.49||33.19||25.42||Front Load|
|J Hancock Balanced A (SVBAX) A+||Balanced - Domestic||-3.28||14.67||15.33||Front Load|
|Permanent Portfolio Fund (PRPFX) A+||Asset Allocation - Domestic||3.83||13.81||13.07||No Load|
|PIMCO All Asset All Authority A (PAUAX) A+||Asset Allocation - Domestic||3.30||10.31||7.57||Front Load|
|Pinnacle Value Fund (PVFIX) A+||Growth - Domestic||-2.70||7.78||11.45||No Load|
|Prudent Bear Fd (BEARX) A+||Growth - Domestic||5.42||16.50||8.92||No Load|
|TFS Market Neutral Fund (TFSMX) A+||Equity Income||-1.52||7.08||13.20||No Load|
|S&P 500 Composite Total Return||-9.45||-5.08||5.85|
|Blend: 60% S&P 500-- 40% Lehman Bros. Aggreg. Bond Index||-4.88||0.03||5.82|
|Blend: 60% MSCI World-- 40% Lehman Bros. Aggreg. Bond Index||-4.54||1.51||8.42|
|For an explanation of our ratings, click here.
Source: TheStreet.com Ratings - Data as of 3/31/2008.
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