It's official. In the year of the Internet, the top-performing fund was, aptly enough,
The Internet Fund, which we profiled
Monday. And the other top-performers of 1998 were, almost without exception, funds that invested in technology.
Here's the official list of the top 15 stock funds for 1998, according to
The OTC funds in the chart, like the No. 2
Profunds Ultra OTC, can best be described as
index funds on steroids. OTC funds use derivatives to try to outpace the Nasdaq 100 daily. With three such funds in the top 15, the strategy worked well in 1998.
The odd fund out in the group is the $103.8 million
Matthews International Korea fund, which has enjoyed South Korea's recent economic bounce and currency stabilization. But the 1998 return masks two prior years of futility. Even with 1998's stellar performance, the fund's three-year annualized return is negative 20.4%.
It's also worth noting that some of the funds on this list -- like the $200,000
Berkshire Capital Growth & Value
fund, the $3.5 million
fund and the $1.5 million
fund -- are quite small. With fewer assets, smaller funds can often be more nimble in their investing than the giants, which might have to invest tens of millions of dollars in a single security to affect their returns.
After all, it's not as difficult to split half a million dollars up into good, manageable investments as it is half a billion.
So to level the playing field, below is a list of top funds for 1998 with assets of at least $100 million.
While tech figures heavily in this list, you also can see several large-cap funds that cashed in on the healthy performance of large-cap stocks, such as
Excelsior Large Cap Growth. While the
returned 28.7%, many market watchers point out that the bottom half of the S&P performed much worse. Through Dec. 15, the bottom half of the index actually posted a negative return.
There also are funds on the list that managed to score big by going small, like
Premier Small Company fund. Managed by Philip Treick, the fund invests primarily in companies with market caps of less than $1 billion. While Treick has scored with some smaller companies like
, he also enjoys some Internet momentum by holding
, at least as of Nov. 30.
And Transamerica, whose managers went out on a full publicity blitz this fall touting the company's growing family of mutual funds, has actually backed up all that talk by placing two funds in the top 15. Treick's $129.1 million
Premier Aggressive Growth also surged on technology names, including
Concentrated funds did well, too, as evidenced by the $12.8 billion
Janus Twenty (which actually held 27 stocks as of the end of September) and the $430.7 million
PBHG Large Cap 20, backing up the theory that the way to beat the market is to concentrate on a few highflying stocks.