The Daily Screen: The Best Mid-Cap Blend Funds

Mid-cap funds have been in the sweet spot of the market this year, and they're the focus of today's Daily Screen.

More specifically, the Screen is tackling mid-cap blend funds. These funds primarily invest in stocks with market caps between $1.5 billion and $9 billion. The "blend" tag indicates that they practice both the value and growth investment styles. Value managers typically troll the market looking for bargains, while growth managers tend to pay steep prices for shares in the fastest-growing companies they can find.

So far this year mid-cap stocks are trouncing large-caps, defined as stocks with market caps above $9 billion. The S&P MidCap 400 Index is up 11.6% year to date, while the mainly large-cap S&P 500 Index is down more than 7% through Wednesday's close, according to Baseline.

Since these mid-cap funds blend the value and growth styles, they could be a diversified way to play the mid-cap slice of the market. As usual we've screened the category for funds that beat the average over the past one- and three-year periods. The first chart lists the top-10 mid-cap funds, ranked by their one-year return.

The second chart gives you a look at which stocks have driven some of these funds. It lists the 10 stocks with the heaviest weighting in the 10 leading funds. Many of these stocks are large-caps. Mid-cap fund managers often hang on to winning picks even after they've appreciated into large-cap territory.

Leading Mid-Cap Blend Funds These mid-cap funds have topped the S&P and their peers this year
Fund	1-Year Return	3-Year Annualized
(PBMCX)PBHG Mid Cap Value	33.6%	20.5%
(WOOPX)One Group Diversified Mid Cap	30.3	9.5
(RIMSX)Rainier Small/Mid Cap	29.4	8
(SPMIX)California Investment S&P MidCap Index	29.3	15.2
(PESPX)Dreyfus MidCap Index	27.4	14.2
(FMDCX)Federated Mid-Cap	27.1	14
(DNLDX)Dreyfus New Leaders	27	9.9
(PARNX)Parnassus	24.3	7.5
(GTSGX)Mosaic Mid-Cap Growth	22.9	5.8
(HAVEX)Haven	22.7	10.2
Avg. Mid-Cap Blend Fund	14.3	5.7
S&P 500	7.1	14.7
Source: Morningstar. Performance figures through Oct. 11.

Under the Hood The stocks with the biggest weighting in the combined portfolios of the 10 funds listed above
Stock	Weighting in Top-10 Funds	Number of Top-10 Funds Owning the Stock
Lam Research(LRCX)	1.1%	2
EMC(EMC)	1.1	1
Intel(INTC)	1.1	1
Electro Science Industries(ESIO)	1	2
Fiserv(FISV)	0.8	5
Cognex(CGNX)	0.7	1
Vitesse Semiconductor(VTSS)	0.7	6
Dentsply International (XRAY)	0.7	2
MedImmune(MEDI)	0.7	4
Dynegy(DYN)	0.7	5
Source: Morningstar. Holdings as of most recent portfolio report.

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