The Daily Screen: The Best Mid-Cap Growth Funds

Judging from mid-cap growth funds' performance this year, being stuck in the middle is not so bad.

On average the mid-cap growth pack is up 6.9%, compared with a 6.9% loss for the S&P 500 through Monday's close. These funds typically feast on faster-growing companies with market caps between $1.5 billion and $9 billion. In recent years investors had ridden hot big-caps, but this year mid-cap stocks have been the place to be. The S&P MidCap 400 Index is up 13.1% on the year, nearly lapping the mostly large-cap S&P 500 three times.

As usual, we've screened the category for the funds that beat their average peer over the past one- and three-year periods, listing the top 10 funds ranked by one-year return. On this list you'll find a slew of hot funds from go-go growth shops like PBHG ((PBHEX)PBHG Select Equity), Oak Associates ((POGSX)Pin Oak Aggressive Stock) and Van Wagoner Funds, whose (VWEGX)Emerging Growth fund made the cut but is closed to new investors.

They're a pretty pricey bunch. On average the 10 leading funds had 66% of their assets in tech stocks and boasted a 46.6 price-to-earnings ratio, compared with 42.9 for the average mid-cap growth fund and 24.9 for the S&P 500, according to Baseline.

They also have more than 40% of their assets in large-cap stocks, typically the product of letting winning picks ride.

As you might imagine, the leading funds have been those that stuck with tech, but chose wisely. The leading funds' top three holdings have been well in the black this year: semiconductor shop SDL(SDLI) (181.3%), networker JDS Uniphase (JDSU) (17.1%) and semiconductor concern PMC-Sierra (PMCS) (134.2%).

For a look at these leading funds' other favorite picks -- all of which are in the tech or communications sectors -- check out the second table below.

Leading Mid-Cap Growth Funds These funds have outperformed their peers and the S&P 500 in recent years
Fund	1-Year Return	3-Year Annualized
(PBHEX)PBHG Select Equity	173.7%	50.9%
(POGSX)Pin Oak Aggressive Stock	106.4	50.1
(LAGRX)Loomis Sayles Aggressive Growth	106	55
(BRAGX)Bridgeway Aggressive Growth	103.3	43.5
(CVGRX)Calamos Growth	99.1	38.7
(SSMGX)Sit Small Cap Growth	95.1	32.2
(VWEGX)Van Wagoner Emerging Growth*	92.7	55.5
(BEGCX)Bender Growth	90.7	49.9
(PTAAX)PIMCO Target	88.4	34.2
(SCFIX)Seligman Capital	83.9	30.9
Avg. Mid-Cap Growth Funds	49.7	23.2
S&P 500	-6.1	13.9
Source: Morningstar. Performance figures through Oct. 4. *Currently closed to new investors.

Under the Hood The stocks with the biggest weighting in the combined portfolios of the 10 funds above
Stock	Weighting in Top-10 Funds	Number of Top-10 Funds Owning the Stock
SDL(SDLI)	2.5%	6
JDS Uniphase(JDSU)	2.3	7
PMC-Sierra(PMCS)	2	8
Network Appliance(NTAP)	1.6	6
Ariba(ARBA)	1.5	1
Cisco Systems(CSCO)	1.4	3
Applied Micro Circuits(AMCC)	1.4	6
Brocade Communications Systems(BRCD)	1.3	4
Exodus Communications(EXDS)	1.2	5
VeriSign(VRSN)	1.1	4
Source: Morningstar. Holdings as of funds' most recent portfolio reports.

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