This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Rock-Solid Funds That Excel in Downturns

NEW YORK (TheStreet) -- At first glance, the performance record of AMF Large Cap Equity (IICAX) might appear uninspiring. During the past 15 years, the actively managed mutual fund returned 4.6% annually, compared to 4.5% for the S&P 500. Why bother with the active portfolio when you might do about as well with an index fund?

But the fund is worth a second look because of an important trait: During downturns, AMF outperforms the benchmark like clockwork. AMF topped the S&P by 6 percentage points in 2002, a year when Internet stocks sank and the benchmark lost 22.2%. In the turmoil of 2008, the S&P lost 37% and AMF outperformed by 8 percentage points.

AMF is not the only large blend fund to top the S&P by limiting losses in downturns. Other low-risk funds that excelled in the past 15 years include American Funds Investment Company of America (AIVSX), Dreyfus Appreciation (DGAGX), and Legg Mason ClearBridge Appreciation (SHAPX). All those winners achieved steady records by focusing on rock-solid blue chips. Because of their reliable performance, the funds can be sound core holdings.

For conservative investors, AMF is especially appealing. The fund ranks as one of the steadiest large blend choices, as indicated by standard deviation, a measure of how much an investment bounces up and down.





AMF's caution is no accident. The fund started in 1953 as a conservative vehicle for New York State savings banks that sought to invest in stocks. The AMF fund is unusual because most states bar savings banks from putting their spare cash in equities. New York regulators took a different approach, figuring that investments in blue chips could help strengthen bank balance sheets.

So far the confidence of regulators has been justified. Since its inception, the fund has returned about 10.5% annually. A bank that invested $10,000 at AMF's beginning would now have $3.4 million. Several of the original bank investors have enjoyed strong returns, staying with the fund over the decades. In recent years, the AMF fund has been opened to retail investors.

Portfolio manager Mark Trautman joined the fund in 1995, and he has kept things simple. The fund typically holds 30 high-quality stocks. The aim is to find solid companies that can increase earnings and dividends consistently.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,943.81 +28.74 0.17%
S&P 500 1,967.57 +2.89 0.15%
NASDAQ 4,415.49 +19.2860 0.44%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs