BOSTON ( TheStreet) -- The most experienced mutual fund managers with the best 10-year performance records, including Bruce Berkowitz and Charles Dreifus, are buying shares of beaten-down financial companies, media firms and commodities suppliers.
The veteran money managers, in their post for at least a decade, run mutual funds with average annual gains of 10% or better over 10 years, when the S&P 500 Index eked out a 1.4% advance per year. Their funds also carry Morningstar's highest rating of five stars, awarded for consistency, stability and acumen.
Of the 7,691 mutual funds for sale in the U.S., there are only six that meet that exacting criteria: Allianz NFJ Small Cap Value (PCVAX), Royce Special Equity (RSEFX), Neuberger Berman Genesis (NBGIX), Yacktman (YACKX), Fairholme (FAIRX) and Perkins Mid-Cap Value (JMIVX).
Judging from their portfolios, there is no common denominator to their performances, unlike many large-cap funds that load up on the same dozen or o stocks, which this year includes iPod and iPhone maker Apple (AAPL) and cloud-computing company Salesforce.com (CRM).The winning funds' managers go their own way, but their portfolios show that they think the economy -- and the stock market -- is going to improve. Several managers have boosted their stakes in insurance, equities-trading and banking companies, and one fund is betting big on media stocks, its manager expecting a pickup in advertising as the economy expands. Other funds have maintained hefty allocations to raw materials, everything from salt to gold, which may be a mixed message. A bet on gold is seen as a defensive move, and none of these funds with gold-related stocks cut those allocations in the most recent reporting period. But several have increased their investments in companies that produce metals needed for industrial goods. The six funds, their details and recent portfolio highlights follow: