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(To update with comments from EPFR Global regarding fund flows.)
TheStreet) -- In what's been a brutal year for the mutual fund industry, managers including Robert Goldfarb, William Joyce and Tom Ognar earned their keep and served as examples for more well-known peers and up-and-comers.
Large-cap stock funds are on pace to finish well behind the benchmark
S&P 500's 1.7% decline, with most set to close out 2011 with
high-single digit or double-digit losses.
Bruce Berkowitz and
Kenneth Heebner have posted big losses this year, with the once-high-flying Heebner of the
CGM Focus Fund(CGMFX) down 28%. CGM Focus generated an 80% return in 2007, the best performance by a U.S. equity fund.
Goldman Sachs says 72% of the of the 261 large-cap core funds (main portfolio holdings) are falling short of their benchmarks this year. Meanwhile, 62% of the 110 large-cap value funds are trailing, while 84% of large-cap growth funds are underperforming.
S&P Capital IQ analysts say stomach-churning volatility in the equity markets are due in great part to the eurozone's sovereign debt soap opera, which has prompted a stampede out of stocks to the safety and steady returns of bonds and money markets.
Stock-fund outflows are more than double what they were last year, at $84 billion through the end of October, according to the Investment Company Institute, an industry research firm funded by mutual fund companies.
Morningstar fund analyst Kevin McDevitt says November's fund flows show that trend continuing, which resulted in redemptions from U.S. and international stock funds, with the money going into taxable bond funds, municipal bond funds, and money market funds, despite historically low yields.
U.S.-stock funds saw $12.5 billion in outflows in November, according to Morningstar, while international-stock funds fared even worse in relative terms with $4.3 billion in outflows, the asset class' worst showing since May, 2010. Indicative of investors' fear, money market funds collected $46 billion in new money in November, "one of their greatest hauls in three years," the firm said.
"It looks like some investors are just selling out and waiting for the New Year to see how the land lies," said EPFR Global Research Director Cameron Brandt in reporting negative equity fund flows for the week ending Dec. 12. "All of the major country and regional equity fund groups, and most of the sub groups, experienced outflows this week."
But investors should be looking at some of the funds listed below. They're providing reliable long-term, double-digit returns as a result of dividend yields as good as or better than those offered by bond and money market funds, as well as the share-price appreciation of their stock holdings.
Long-term investors ought to note that several have 15-year average annual returns of 8% -- and one rang the bell at 12%.
The funds' investors are still in the market and poised to benefit from the quick upside gains that are likely to come when the European miasma gets untangled and investors return to equities.
Separately, Morningstar unveiled its candidates for domestic-stock fund manager of the year. They are Robert Goldfarb and David Poppe, Bill Nygren, Donald and Stephen Yacktman, Scott Satterwhite and James Kieffer, and Pat English and Andy Ramer.
So here, then, are 10 U.S. stock mutual funds with at least $1 billion in assets that have been leaders in their fund category this year: