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.

NAME

TICKER

TSCR Grade

1 Month Return

3 Month Return

OBJECTIVE

Direxion Nasdaq 100 Bear 2.5X Inv

DXQSX

U

-8.29

38.63

Growth - Domestic

Profunds-Ultra Short Japan Inv

UKPIX

U

5.97

34.01

Non-US Equity

Rydex Dyn-Inv OTC 2x Strategy A

RYVTX

E-

-6.00

31.66

Aggressive Growth

Direxion Small Cp Bear 2.5X

DXRSX

E-

-5.26

19.98

Small Cap

ProFunds-Ultra Short Mid-Cap Inv

UIPIX

E-

0.47

16.65

Mid Cap

Direxion Developed Mkt Bear 2.0X Fd

DXDSX

U

-2.25

15.69

Sector - Other

Profunds-Ultra Sh Emer Mkt Inv

UVPIX

U

9.06

15.10

Emerging Market Equity

PIMCO Commodity Real Ret Str A

PCRAX

B+

-7.48

14.17

Sector - Energy/Natural Res

PIMCO StocksPLUS Tr Sh Strat A

PSSAX

A

-0.43

13.24

Growth & Income

Evergreen Precious Metals A

EKWAX

C+

-9.45

8.56

Sector - Precious Metals

PIMCO RealEstate RlRetrn Str A

PETAX

D

5.87

7.40

Sector - Real Estate

Merk Hard Currency Fund Investor

MERKX

U

1.31

7.02

Sector - Financial Services

Highbridge Stat Mkt Neutral A

HSKAX

U

0.26

4.14

Equity Income

Global Opportunities Bd Inst

GOBIX

U

-0.86

2.03

Global Equity

Fidelity Select Pharmaceuticals

FPHAX

B+

10.21

-0.40

Sector - Health/Biotechnology

Ivy Fund-Science & Tech A

WSTAX

B-

0.72

-8.47

Sector - Tech/Communications

Flex-funds Socially Resp Utilit Fd

FLRUX

A+

-1.86

-8.90

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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