10 Top-Performing Alternative Mutual Funds

Beyond the pigeonhole of pure stock or pure bond mutual funds are so-called alternative funds, which seek out and follow hybrid strategies. TheStreet.com Ratings has reviewed the best-performing open-end funds in the third quarter that fall outside of usual fund categories.

In the third quarter, the carnage was real. The Diamonds Trust (DIA Quote), which tracks the performance of the Dow Jones Industrial Average, slid 3.8%, while the S&P 500 Index sank the SPDR Trust (SPY Quote) by 8.9%. The PowerShares QQQ (QQQQ Quote), which gauges the Nasdaq 100 Index, collapsed 13.8%.

By comparison, the meager returns generated by the top 10 hybrid-strategy funds look pretty good. The only exception is the 21.3% return generated by the Direxion Dollar Bull 2.5X Fund (DXDBX Quote) -- that performance looks plain great. The U.S. Dollar Index, tracked at 250% leverage by this fund, appreciated 9.6% in the quarter as the economic prospects of the U.S. appeared relatively stronger than those of Europe, Japan and the U.K. ...