January's Top-Rated Funds
Bond Fund Analysis by Sam Patel
The top 10 list of bond funds for the month of January 2008 shows the state of the economy, with the Treasury market rallying on the short end following the slashing of rates by the
Federal Reserve
. This helped boost returns of Tax Free Money Market Funds, which accounted for the majority of funds in our list.
Fund Name | Ticker | 1 Month Return | 1 Year Return | 3 Year Return | Category |
Evergreen Inst US Govt MM Inv | EGNXX | 0.33 | 4.75 | 4.19 | Tax Free Money Market |
US Govt Securities Savings Fund | UGSXX | 0.3 | 4.58 | 4.02 | Tax Free Money Market |
UMB Scout Federal Money Market Inv | UMFXX | 0.3 | 4.52 | 3.96 | Tax Free Money Market |
Colorado Bond Shares Tax-Exempt A | HICOX | 0.84 | 5.71 | 5.55 | Municipal - Single State |
Calvert Social Invest MM Cl O | CSIXX | 0.3 | 4.53 | 4.13 | Tax Free Money Market |
Monetta Trust-Govt Money Market | MONXX | 0.33 | 4.75 | 4.01 | Tax Free Money Market |
Fidelity Treasury Capital Reserves | FSRXX | 0.21 | 3.92 | 3.52 | Tax Free Money Market |
Vanguard Lmtd-Term Tax-Exempt Inv | VMLTX | 1.69 | 6.06 | 3.52 | Municipal - National |
Federated Money Market Mgt Eagle Sh | MMMXX | 0.36 | 4.36 | 3.55 | Tax Free Money Market |
Vanguard Short-Term Tax-Exempt Inv | VWSTX | 1.11 | 5.12 | 3.39 | Municipal - National |
(All funds above carry a TSC rating of A+.)
In short, money came off the table as fear and risk gripped the market.
The table below shows Loan Participation Funds dominated the list in January 2007 but with the gradual unwinding of the subprime issues, and the instability of debt market in general, investors responded by moving to the other end of the risk spectrum in 2008 and embracing money market funds.
Loan Participation funds invest predominantly in bank loans made to low credit rated companies. This is a higher risk situation that attracts a higher return. Investors were very keen on these funds back in 2007 when the economy and the debt markets were significantly more stable and risk and fear were nowhere to be seen. One year later, and there has been a complete reversal in risk appetite.
Fund Name | Ticker | Category |
Highland Floating Rate Advantage A | XSFRX | Loan Participation |
Colorado Bond Shares Tax-Exempt A | HICOX | Municipal - Single State |
Highland Floating Rate Fund A | XLFAX | Loan Participation |
Evergreen FL High Income Muni I | EFHYX | Municipal - Single State |
Oppenheimer Sen-Floating Rate C | XOSCX | Loan Participation |
Van Kampen Senior Loan Fund IC | XSLCX | Loan Participation |
Morgan Stanley Prime Inc Trust | XPITX | Loan Participation |
Van Kampen Senior Loan Fund IB | XPRTX | Loan Participation |
Evergreen Inst US Govt MM Inv | EGNXX | Tax Free Money Market |
Eaton Vance Sr Floating-Rate Inst | EIFRX | Loan Participation |
Stock Fund Analysis by Kevin Baker
As of Jan. 31, the top-rated open-end stock fund this month is the
Permanent Portfolio Fund
(PRPFX) - Get Permanent Portfolio Permanent I Report
. The fund's stated objective is to preserve long-term purchasing power with a portfolio of gold, silver and Swiss francs as well as natural resource companies.
This is just the type of portfolio you would expect to do well in these jittery times. Below are the other funds making our top 10 list.
The second-place fund,
Ivy Asset Strategy Fund
TheStreet Recommends
(WASAX) - Get Delaware Ivy Asset Strategy A Report
, hit the right mix of sectors with 11.3% mining, 10.9% diversified financial services, 9.4% telecommunications, 5/9% oil and gas, 5.4% alternative energy sources and 4.4% agriculture.
This past year was the right time to be long a global portfolio of fund holdings such as
Monsanto
(MON)
up 120.43%,
Rio Tinto
(RTP) - Get Reinvent Technology Partners Class A Report
up 103.59%,
Nintendo
(NTDOY) - Get Nintendo Co., Ltd. Report
up 69.13%,
Transocean
(RIG) - Get Transocean Ltd. Report
up 68.41% and
Sunpower
(SPWR) - Get SunPower Corporation Report
up 48.85%.
The
PIMCO All Asset All Authority A Fund
(PAUAX) - Get PIMCO All Asset All Authority A Report
is included in the list of stock funds, even though it has only about one-third of 1% invested directly in equities, because it's a fund of PIMCO funds, some of which are PIMCO StockPlus funds that track various international equity indices with the use of derivative securities.
Finally, it is notable that a contrarian fund such as the
Prudent Bear Fund
(BEARX) - Get Federated Hermes Prudent Bear A Report
managed to climb into the top 10 by selling short equities securities.
The fund does bet on some stocks going up, mostly Canadian mining shares. Over the last 12 months, holdings such as
Canplats Resources
(CPQRF)
soared 614%,
Duran Ventures
(DUVNF)
leaped 391% and
East Asia Minerals
(EAIAF)
popped 292%.
Fund (Ticker) Rating | Total Return 3 Year | Total Return 1 Year | Total Return 1 Month | Investment Objective |
Permanent Portfolio Fund (PRPFX) A+ | 13.09% | 13.53% | 2.64% | Asset Allocation - Domestic |
Ivy Fund-Asset Strategy A (WASAX) A+ | 26.80% | 35.86% | -2.41% | Asset Allocation - Domestic |
Pinnacle Value Fund (PVFIX) A+ | 11.34% | 8.16% | -2.70% | Growth - Domestic |
J Hancock Balanced A (SVBAX) A+ | 16.15% | 18.24% | -3.00% | Balanced - Domestic |
PIMCO All Asset All Authority A (PAUAX) A+ | 7.34% | 13.19% | 3.10% | Asset Allocation - Domestic |
BB&T Equity Income A (BAEIX) A+ | 13.58% | 4.92% | -2.07% | Equity Income |
Prudent Bear Fd (BEARX) A+ | 9.07% | 17.78% | 2.39% | Growth - Domestic |
BlackRock Glb Allocation Inv A (MDLOX) A+ | 14.12% | 14.14% | -1.72% | Asset Allocation - Global |
Fidelity Adv Consumer Staples A (FDAGX) A+ | 12.91% | 10.73% | -6.00% | Growth - Domestic |
AllianceBern Utility Income A (AUIAX) A+ | 18.30% | 13.89% | -5.72% | Sector Fund - Utility |
Source: TheStreet.com Ratings - Jan. 31, 2008 Data.
Read this for an explanation of our ratings,
click here.
ETF Analysis by Richard Widows
With the domestic equity markets sagging, the economy stagnating and the ever-deepening credit crunch eroding whatever faith remains in the U.S. dollar, an eclectic group of exchange-traded funds emerged as the highest ranked in that investment category by TheStreet.com Ratings.
While fixed-income funds comprise only a small fraction of exchange-traded funds, four bond offerings populate the accompanying list of the 10 highest rated ETFs. They represent the conservative extreme of the list, as two invest in Treasury securities and two in a combination of government notes and higher-rated corporate debt.
The persistent weakness in the U.S. dollar, combined with lofty commodity prices, propelled two precious-metals funds to the top ratings roster. One focuses solely on gold while the
PowerShares DB Precious Metals Fund
(DBP) - Get Invesco DB Precious Metals Fund Report
invests 80% in gold futures and 20% in forward silver contracts.
The sinking dollar lifted two currency funds into the top 10. Investor uneasiness about the greenback are especially reflected in the strength of the
Currency Shares Swiss Franc Trust
(FXF) - Get Invesco CurrencyShares Swiss Franc Trust Report
, which places its assets in what has traditionally been among the strongest and most stable currencies around.
Topping out the 10 highest rated ETFs are two "inverse" funds, each "short" a popular small-cap stock index.
The pair of precious-metals funds on the list, along with the two inverse small-cap ETFs, have each enjoyed double-digit gains during the most recent three calendar months, a period when the general stock market has moved relentlessly downhill.
This article was written by staff members of TheStreet.com Ratings.
