10 Best-Performing Mutual Funds of 2011
BOSTON (TheStreet) -- Mutual funds that buy shares of health-care and real-estate companies leapfrogged those that own gold and energy stocks to become the best performers so far this year.
Health-care funds are far and away the winners at the midway point this year, with an average return of 12.9% through June 22, including a 9.2% run-up over the past three months, according to fund tracker Morningstar. Real-estate-focused funds have risen 9% this year, utilities funds have climbed 6.8% and consumer-staples funds have increased 5.2%. The benchmark S&P 500 Index is up 3.3%.
Defensive stocks -- health care, consumer staples and utilities, among others -- tend to do well because those companies sell necessities that aren't affected as much by a weak economy. Funds with big bets on gold and energy dominated the rankings list earlier in the year with first-quarter gains of 10%, but as the economic recovery sputtered, investors shifted to defensive stocks.
Whereas growth companies such as Apple (AAPL), Micron Technology (MU) and NVIDIA (NVDA) were technology darlings earlier in the year, for the past three months the stars have been real estate investment trust SL Green Realty (SLG), up 26% this year; health-insurance company UnitedHealth (UNH), up 44%; and biotechnology firm Biogen-Idec (BIIB), up 48%.Here are 10 top-performing mutual funds in a variety of sectors and their top stock picks: Fidelity Select Medical Delivery (FSHCX), with assets of $899 million, is up 17.6% this year, including a 6.9% gain over the past three months. The fund's top holding is Medco Health Solutions (MHS), at 10% of the portfolio, followed by Express Scripts (ESRX), at 8.8%, and UnitedHealth Group (UNH), at 7%. The top two picks are both big pharmacy-benefits managers that have poor-performing stocks this year. Medco Health, the nation's largest in that segment, is down 10.5%, while Express Scripts is little changed. But UnitedHealth, a health-insurance provider, has jumped 44.2% this year. The best performer among the fund's top 25 stocks is Sunrise Senior Living (SRZ), an operator of 350 senior-living communities. Its shares are up 58% this year.
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