More than half of 47 newly rated mutual funds take an asset-allocation or fund-of-funds approach to investing.
Five of the 47 funds that opened for business in June 2006 received our top rating of "excellent" with grades of A-minus or better. Another three start at "good" with grades from B-minus to B-plus. All eight land in the "buy" range.
The highest-rated fund of the group,
Rydex Series Essential Portfolio -- Conservative Fund
earned our second-highest rating of A. It did this by only losing a small amount of money and maintaining lower volatility.
This fund of mostly Rydex funds lost 12% in one year and had an average annual return of 1.2% over three years. Aside from 12% of assets sitting in cash, the fund is allocated to 46% stock funds and 43% fixed-income securities. Top stock holdings include
Procter & Gamble
Philip Morris International
The largest fund holding of the A-minus-rated
Vanguard Target Retirement 2010 Fund
Vanguard Total Stock Market Index Fund
. This fund is top-loaded with the likes of
Johnson & Johnson
TheStreet.com Ratings condenses the available fund performance and risk data into a single composite opinion of each fund's risk-adjusted performance. This allows the unbiased identification of those funds that have historically done well and those that have underperformed the market. While there is no guarantee of future performance, these Investment Ratings provide a solid framework for making informed, timely investment decisions. The funds listed below have reached their three year anniversary.
Funds rated A or B are considered "buy"-rated based on a track record of higher-than-average risk-adjusted performance. Funds at the C level are rated as "hold," while underperformers at the D and E levels our model rank as "sell."
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Kevin Baker became the senior financial analyst for TSC Ratings upon the August 2006 acquisition of Weiss Ratings by TheStreet.com, covering mutual funds. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.