Back on Aug. 19, when I published the first "Top 5 'Ultra' Funds" article, I had no idea how huge the response would be. Readers sent in comments, and Dreyfus put out a press release.
The purpose of the list is to provide investors looking to minimize transaction costs with suggestions for fund families that have many good funds. The groups with the most funds in the top-200 list of our Quarterly Guide to Mutual Funds qualify as 'ultra' fund families. This time the number of ultra funds was slightly higher than the last quarter, because of ties.
MFS, a unit of
Sun Life Financial
, topped the list again for the third quarter, with 14 funds.
, Dreyfus, a unit of
,and Putnam Investments tied for second with nine funds. AIM, a unit of
, Fidelity and Vanguard tied for third place with eight funds.
One comment I received suggested that the results should be given without the effect of multiple share classes. Even when the clones are eliminated, MFS still comes out on top with six unique funds. Dimensional Investments and Putnam followed with five. AIM, Fidelity, GMO and Vanguard each had four unique funds.
, BlackRock, Dreyfus, Franklin Templeton, also known as
, Phoenix Investment Partners, a subsidiary of
The Phoenix Companies
, and TIAA-CREF each had three unique funds in the top 200.
Taking a much wider view than just the top 200 funds, there are 30 fund families that have 100 or more funds for which TheStreet.com Ratings assigns rankings. The list below shows how many funds we rate for each fund family and the percentage of those funds that fall in the top 30%, middle 40% and bottom 30% of our universe of open-end stock mutual funds.
With our risk-adjusted return model, a ranking in the top 30% of funds represents an overall investment rating from A-plus down to B-minus. The middle 40% includes C-plus, C and C-minus. The bottom 30% ranges from D-plus down to E-minus. To be ranked, a fund must have at least three years of data available.
The standout winner is American Funds with 70.6%, or 149, of its 211 ranked funds in our top 30% and just eight funds, or 3.8%, in the bottom 30%. Franklin Templeton, Vanguard and
, also excelled, having more than half their ranked funds in the top 30%.
A fund family does not have to be huge to warrant recognition or consideration. In the next tier of fund families, those with between 40 and 99 ranked funds, Ivy Funds, a unit of
Waddell & Reed Financial
, and UBS Global Asset Management, a unit of
, topped our list.
If you don't like to keep all your eggs in one basket, there are smaller fund families with noteworthy performances among which you can pick and choose. There are 73 fund families that have between 10 to 39 ranked funds. Below are the 20 best-performing fund families of this group.
That leaves exactly 300 fund families with fewer than 10 funds we rank. Two of those families have all of their funds ranked in the top 30%. They are Third Avenue, a unit of
, with four funds, and Dodge & Cox, with three funds.
Whether you decide to keep your retirement eggs at one large firm or spread them out among several smaller ones, the fund family you choose today can make all the difference in the world.
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.