Investors who had written off housing, retailing and financial-services stocks were surprised when mutual funds specializing in those industries jumped to the top of the performance pack in August.
Still undecided is whether the advances were dead-cat bounces or initial spasms in a return to life.
International funds, especially those focusing on emerging markets and precious metals, also topped the list. However, the winners in those tumbling sectors were "short," and "inverse-leveraged" funds that move in the opposite direction of stock prices.
The quintet on the accompanying list represent the top-gaining open-end stock funds for August, when "inverse" and "leveraged" funds are purged.
Exceeding even the most leveraged of stock funds during the month was the
Harbor SMID Value Fund
. It vaulted 17.6% by keeping the faith in small and mid-cap stocks, areas also not among those touted by most pundits in recent months. Its largest holdings include
Reports of the death of housing may have been exaggerated, as witnessed by the 8.2% rebound in the
Fidelity Select Construction and Housing Fund
. Its performance resulted from holdings that include
A sign that consumers haven't gone into hiding was also reflected in a surge of 8.2% by the
Rydex Series-Retailing Fund
. Like the Fidelity fund, it has a position in Home Depot, as well as
Fourth-best was the more traditional
Olstein Strategic Opportunities Fund
. Guided by master analyst Robert Olstein, the fund has bet that consumers will step out for cheaper meals on a fairly regular basis. It has major positions in
Evidence that the financial sector still lives was presented by a burst of 7.4% by the
Burnham Financial Industries Fund
. Although its portfolio includes industry standbys
JP Morgan Chase
, its biggest positions are in
People's United Financial
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.