10 Top-Performing Alternative Mutual Funds
10/03/08 - 06:59 AM EDT
Kevin Baker
Beyond the pigeonhole of pure stock or pure bond mutual funds are so-called alternative funds, which seek out and follow hybrid strategies. TheStreet.com Ratings has reviewed the best-performing open-end funds in the third quarter that fall outside of usual fund categories.
In the third quarter, the carnage was real. The Diamonds Trust (DIA Quote - Cramer on DIA - Stock Picks), which tracks the performance of the Dow Jones Industrial Average, slid 3.8%, while the S&P 500 Index sank the SPDR Trust (SPY Quote - Cramer on SPY - Stock Picks) by 8.9%. The PowerShares QQQ (QQQQ Quote - Cramer on QQQQ - Stock Picks), which gauges the Nasdaq 100 Index, collapsed 13.8%. By comparison, the meager returns generated by the top 10 hybrid-strategy funds look pretty good. The only exception is the 21.3% return generated by the Direxion Dollar Bull 2.5X Fund (DXDBX Quote - Cramer on DXDBX - Stock Picks) -- that performance looks plain great. The U.S. Dollar Index, tracked at 250% leverage by this fund, appreciated 9.6% in the quarter as the economic prospects of the U.S. appeared relatively stronger than those of Europe, Japan and the U.K. With a flexible portfolio strategy, the Comstock Capital Value Fund (DRCVX Quote - Cramer on DRCVX - Stock Picks) ranked second with a return of 5.5% for the most recent quarter and 21.2% over the last 12 months. At the beginning of the third quarter, the Comstock fund shifted to holding 87% U.S. Treasury bills and bearish positions of 45.8% in bets against the S&P 500 with futures and puts and 23% equities shorts on Wells Fargo (WFC Quote - Cramer on WFC - Stock Picks), Nokia (NOK Quote - Cramer on NOK - Stock Picks) and SAP (SAP Quote - Cramer on SAP - Stock Picks). However, the Comstock fund's 2.6% portfolio position in PowerShares DB US Dollar Index Bearish Fund (UDN Quote - Cramer on UDN - Stock Picks), which fell 8.4%, and 2.2% position in StreetTracks Gold Trust (symbol Quote - Cramer on symbol - Stock Picks), which sank 6.9%, tempered what could have been an even stronger quarterly return. Lastly, the Direxion 10-Year Note Bull 2.5X Fund (DXKLX Quote - Cramer on DXKLX - Stock Picks) is up 3.4% for the quarter and 21.7% for the year, a direct beneficiary of the flight to quality during the current market turmoil. Similarly, the Pimco Stockplus TR Short Strategy Fund (PSTIX Quote - Cramer on PSTIX - Stock Picks) gained 3.1% in the last three months and 28.1% in the last 12 due to its bets against the stock market.| 10 Best-Performing Alternative Investment Mutual Funds in the Third Quarter | ||||
| Fund (Ticker), Rating | Total Return 3 Months | Total Return 1 Month | Total Return 1 Year | Objective |
| Direxion Dollar Bull 2.5 X Fund (DXDBX US), U | 21.33% | 4.01% | NA | Currency |
| Comstock Capital Value Fund (DRCVX US), D | 5.46% | 10.57% | 21.17% | Flexible Portfolio |
| Managers AMG Funds - FQ Global Alternatives Fund (MGACX US), U | 4.56% | 0.98% | 0.53% | Derivative-Asset Allocation |
| Direxion 10 Year Note Bull 2.5X Fund (DXKLX US), U | 3.44% | -1.66% | 21.65% | Derivative-Asset Allocation |
| TIAA-CREF Institutional Real Estate Securities Fund (TIREX US), D | 3.10% | -0.86% | -13.54% | Sector Fund-Asset Allocation |
| PIMCO StocksPlus TR Short Strategy Fund (PSTIX US), A+ | 3.09% | 3.63% | 28.12% | Derivative-Asset Allocation |
| ING GET Fund US Core Portfolio-11 (IGUCX US), U | 2.20% | -0.63% | -11.18% | Flexible Portfolio |
| Pioneer Protected Principal Plus Fund II (PPFAX US), C | 1.65% | 0.77% | 3.50% | Balanced |
| Morgan Stanley FX Series Funds - Alpha Plus Strategy Portfolio (FXPAX US), U | 1.57% | -1.82% | -0.10% | Currency |
| Marketfield Fund (MFLDX US), U | 1.56% | -1.33% | NA | Flexible Portfolio |
| Source: TheStreet.com Ratings and Bloomberg | ||||
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