In terms of average returns in each category of stock mutual funds for the first quarter of 2008, precious metals came out on top.
The surprise was real estate funds.
That refers more to REIT and commercial real estate investment than anything to do with residential housing and the subprime issues.
It looks as if, for now at least, commercial real estate has yet to experience anything close to the problems in the residential sector, however a weakening economy will definitely adversely affect this sector into 2008.
On average, the real estate classification of stock funds was down only 0.63%.
Heavy average losses can be seen in all other categories exposed to the U.S. economy -- and indeed, the global economy -- in particular in emerging economies.
Moving away from the averages for each objective and focusing more on individual funds in categories, we see a different picture. There are winners in nearly every category.
We now present the list of the most profitable funds in each below.
1 Month Return
3 Month Return
Direxion Nasdaq 100 Bear 2.5X Inv
Growth - Domestic
Profunds-Ultra Short Japan Inv
Rydex Dyn-Inv OTC 2x Strategy A
Direxion Small Cp Bear 2.5X
ProFunds-Ultra Short Mid-Cap Inv
Direxion Developed Mkt Bear 2.0X Fd
Sector - Other
Profunds-Ultra Sh Emer Mkt Inv
Emerging Market Equity
PIMCO Commodity Real Ret Str A
Sector - Energy/Natural Res
PIMCO StocksPLUS Tr Sh Strat A
Growth & Income
Evergreen Precious Metals A
Sector - Precious Metals
PIMCO RealEstate RlRetrn Str A
Sector - Real Estate
Merk Hard Currency Fund Investor
Sector - Financial Services
Highbridge Stat Mkt Neutral A
Global Opportunities Bd Inst
Fidelity Select Pharmaceuticals
Sector - Health/Biotechnology
Ivy Fund-Science & Tech A
Sector - Tech/Communications
Flex-funds Socially Resp Utilit Fd
Sector - Utilities
With the downturn in the U.S. markets, globally inverse funds and funds with short strategies generated outstanding returns on a quarterly basis.
Over the last month results have been mixed, but that is to be expected with inverse funds, as they will not capitalize when and if markets rebound after a period of selling.
If the market continues to fall over the longer term then these funds will be the place to be for the next quarter.
Sam Patel, CFA, is the manager of mutual fund research for the TheStreet.com Ratings.
In keeping with TSC's Investment Policy, employees of TheStreet.com Ratings with access to pre-publication ratings data must pre-clear any potential trade through the legal department, and are prohibited from trading any security that is the subject of an unpublished rating revision until the second business day after the rating is published.
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