May's Top Hybrid Fund Finds Undervalued Stocks

The top hybrid funds for the month of May utilized various strategies to generate their monthly returns.

The Greenspring Fund(GRSPX Quote) is based on a strategy of finding undervalued stocks and special situation bonds.

This type of strategy may be worth keeping in mind if markets continue to slide and more specific strategies, such as value investing and special situations, which have more to do with a misalignment of prices than valuation of securities, come into vogue.

The value approach, if implemented correctly, should avoid paying too high a price, and is long term in nature. This combined with special situations, which generally offer the ability to profit short term from the misalignment of security prices, can complement each other -- a very Warren Buffett-like combination.

The remainder of the top returning funds employed more generic strategies, such as a focus on small to medium domestic growth stocks combined with an international exposure as in the case of the Seligman Asset Allocation Aggressive Growth Fund(STHAX Quote). STHAX is actually a fund of funds made up of other Seligman funds.

The other fund of interest was the CGM Mutual Fund(LOMMX Quote), which invests 80% of its assets under management in lower quality convertible debt.

MFID	NAME, TICKER & TSC GRADE	OBJECTIVE	MAY 08 RETN %	RETURN_YTD_MKT	RETURN_1YR_MKT	RETURN_3YR_MKT	MONTHEND_PD	PD_6MO_AVG
25540	Morgan Stanley Eastern Europe (RNE) C+	Non-US Equity	15.39	-1.05	35.43	44.39	-5.89	-6.57
3767	Central Europe & Russia Fund (CEE) B	Non-US Equity	14.88	0.09	36.21	43.28	-7.47	-9.16
142102	Cohen&Steers Worldwide Realty Inc (RWF) D-	Global Equity	14.09	11.80	-18.24	8.75	3.17	-0.50
8093	Latin American Discovery Fund (LDF) C+	Non-US Equity	14.05	13.22	40.66	57.78	-5.57	-5.04
3721	Royce Focus Trust (FUND) B+	Growth - Domestic	13.76	10.26	1.68	22.26	2.96	-0.70
161413	Claymore Raymond James SB1 Ety Fd (RYJ) E+	Equity Income	13.20	8.55	4.25	N/A	-3.30	-9.17
3661	Castle Convertible Fund (CVF) B	Growth & Income	11.90	8.55	6.29	12.69	-3.58	-8.84
3796	Mexico Fund (MXF) A	Non-US Equity	10.31	7.32	4.71	30.81	-15.10	-15.43
10387	Royce Micro-Cap Trust (RMT) C	Growth - Domestic	10.26	6.75	-13.91	7.71	-1.51	-7.67
19666	Templeton Russia&East European Fund (TRF) C+	Non-US Equity	10.19	-12.93	9.09	37.89	-1.15	2.09
3692	Royce Value Trust (RVT) C	Growth - Domestic	10.08	2.28	-8.84	8.33	-0.43	-5.42
8076	Latin America Equity Fund (LAQ) B+	Non-US Equity	10.01	15.22	39.33	54.82	-9.59	-9.97
3857	Turkish Investment Fund (TKF) C	Non-US Equity	9.87	-14.61	7.02	21.03	8.42	5.67
96096	LMP Real Estate Income Fund Inc (RIT) C	Growth & Income	9.82	28.63	-17.57	12.67	6.22	-2.63
3885	Japan Smaller Cap Fund Inc. (JOF) E	Non-US Equity	9.49	6.73	-13.65	4.07	3.36	-2.47
117370	PIMCO Floating Rate Income Fund (PFL) C-	Loan Participation	8.91	8.52	-14.10	6.19	5.36	-0.02
8094	Mexico Equity & Income Fund (MXE) C+	Non-US Equity	8.75	13.76	1.95	39.08	-13.47	-14.75
89696	BlackRock VA Muni Bond Trust (BHV) B-	Municipal Single State	8.47	8.75	5.80	9.52	21.52	16.70
130734	Clough Global Allocation Fund (GLV) C+	Growth & Income	8.44	3.73	15.98	9.05	-8.82	-9.17
96223	Cohen&Steers Premium Income Realty (RPF) C+	Growth & Income	8.28	30.37	-5.91	14.15	7.60	1.79