The best-performing hybrid funds for the second quarter comprised one convertible fund, the Fidelity Convertible Securities Fund (FCVSX), and two domestic focused balanced funds -- namely, the CGM Mutual Fund (LOMMX) and the Evergreen Diversified Capital Builder Fund (EKBAX).Fidelity's convertible fund returned 10.6% for the three months ended June 30 employing a strategy of investing in lower-quality convertible debt securities (50% allocation) and preferred stock (31% allocation). The fund seeks to earn a high level of total return -- i.e., income and capital appreciation -- and has been aided in this quest by its allocation of 11.5% in the oil and gas sector and 6.51% in oil and gas services, which enabled it to capitalize on the run-up in energy. The other sectors in its portfolio include chemicals (8.53%), semiconductors (6.66%), mining (5.49%) and banking (5.42%).
What Made Top Hybrid Funds Work
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