The most recent top-rated equity funds graded by TheStreet.com Ratings are dotted with entrants that wouldn't qualify as "stock" funds in a traditional sense.
As appropriate for these uncertain investment times, half of the 10 highest-rated open-end equity funds in the accompanying table either focus on "hard assets" or have portfolios constructed in such a way as to be largely net unexposed to the stock market.
The two highest rated funds, the
Permanent Portfolio Fund
Merk Hard Currency Fund Investor
, along with the
Prudent Bear Fund
, have investments in "hard" (tangible) assets such as precious metals and other minerals.
Two other funds, the
TFS Market Neutral Fund
Aberdeen U.S. Growth Leaders Long/Short Fund
, combine long and short investment positions that can cancel each other out to near-neutral net exposure to the broad equity markets. Such funds, when successful, achieve competitive total investment performances with far less volatility of returns than traditional "long-only" stock funds.
MLSAX's top portfolio holdings include
Goldman Sachs Group
With annualized growth of 16.29% over the past three years and a return of 9.93% over the last 12 months, TFSMX has been particularly successful at picking appropriate long and short investments.
Ironically, with hard-asset and long-short funds dominating the spotlight, a quartet of funds that would be considered as highly conservative ended up on the list.
Two utility funds, the
AIM Utilities Fund
Alliance Bernstein Utility Income Fund
, have each grown at compound rates of more than 15% annually over the past three years. Both count
among their top portfolio holdings, with IAUTX also favoring
John Hancock Balanced Fund
has combined its cautious strategy of investing in equities and fixed income instruments correctly enough to enrich its holdings at an annual rate of 14.73% over the last three years and 11.32% over the most recent 12 months. Its top holdings include the diverse investments of
Archer Daniels Midland
The fourth fund on the top-rated list with a relatively conservative approach to investments is the
Oakmark Equity and Income Fund II
While SVBAX and OARBX tend to maintain relatively constant proportions of equities and fixed income holdings in their portfolios, the
Blackrock Global Allocation Investment Fund
has a strategic mandate that allows more extreme mixing of stocks and bonds as well as domestic and international investments. Its largest U.S. investments include
American International Group
Richard Widows is a senior financial analyst for TheStreet.com Ratings. Prior to joining TheStreet.com, Widows was senior product manager for quantitative analytics at Thomson Financial. After receiving an M.B.A. from Santa Clara University in California, his career included development of investment information systems at data firms, including the Lipper division of Reuters. His international experience includes assignments in the U.K. and East Asia.