Few Remaining Winning Streaks in Mutual Funds

When we last reviewed the perpetually winning mutual funds back in January 2008, the New England Patriots were one game away from a perfect season. They stumbled and so did the financial world, which has since been tossed on its head.

With the market's extreme volatility and bear market selloff, all five perpetually winning open-end stock mutual funds that had maintained A+ grades from TheStreet.com Ratings for the two-year period ending Dec. 31, 2007, have fallen back into the pack. Likewise for the additional nine funds that had held A or A+ ratings for those two years.

As part of our quarterly fund review, TheStreet.com Ratings ranked and awarded letter grades to 12,290 open-end stock mutual funds. Of those, 3,607 earned the equivalent of a buy rating with letter grades of B- or better. Once multiple share classes are eliminated, the number of buy-rated funds drops to 969 unique funds.

Only 55 of these funds have maintained a buy rating of B- or better for the last two years by outperforming 70% of the universe of open-end stock mutual funds we rate. Only one primary share class fund, the Amana Income Fund (AMANX Quote) has not dropped below a rating of A- for the past two years.

The Amana Income Fund selects its investments based on Islamic principles, leading to large holdings of Nike (NKE Quote), Kimberly-Clark (KMB Quote), Procter & Gamble (PG Quote), 3M (MMM Quote) and Kellogg (K Quote).

When opening the criteria to institutional and other non-primary share class funds, two more funds make the A- or better list. The BlackRock Equity Dividend Fund (MADVX Quote) has outperformed its peers by betting at least 80% of its assets in dividend-paying securities. The fund's notable holdings include Exxon Mobil (XOM Quote), AT&T (T Quote), Bank of America (BAC Quote) and General Electric (GE Quote).

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