With all the major U.S. stock indices ending in positive territory for 2006, it wasn't hard to pick an equity fund that was a winner last year. But how about a fund that had positive gains every year for the past 10 years? We found 10 such funds.

Each of the 10 stock funds in the accompanying chart can proudly boast that it survived the last decade without a single year of negative returns -- and that includes surviving the bear market years of 2000-02:

  • (DDIAX) Delaware Dividend Income
  • (EAAFX) Evergreen Asset Allocation
  • (SGOVX) First Eagle Overseas Fund
  • (GABCX) Gabelli ABC Fund
  • (ITCSX) ING T. Rowe Price Capital Appreciation
  • (EXDAX) Manning & Napier Conservative Term Series
  • (PRPFX) Permanent Portfolio Fund
  • (PRWCX) T. Rowe Price Capital Appreciation Fund
  • (VASIX) Vanguard LifeStrategy Income Fund
  • (SAUPX) WM Flexible Inc Portfolio

That sets them apart from the rest of the 4,218 stock and hybrid stock and bond funds tracked by TheStreet.com Ratings that have a been around for at least 10 years. ( TSC Ratings counts each share class of a mutual fund as a separate fund.)

These 10 tenacious funds have generally followed a barbell strategy, using cash and fixed-income investments to achieve consistency of returns that wouldn't be attainable with stocks alone.

The percentage of assets these funds allocate to stocks ranges from a low of 27.8% for the Manning & Napier Conservative Term Series Fund to a high of 70% for First Eagle Overseas Fund.

Perhaps because of its relatively small buffer of cash and bonds, First Eagle Overseas led the group with an impressive 10-year compound annualized return of 15.89%.

The only other fund risking an exposure of more than two-thirds of its assets in stocks was the T. Rowe Price Capital Appreciation Funds, with 67.2% in equities. It had the third-best 10-year compound annualized return, at 12.16%.

Two other funds, ING T. Rowe Price Capital Appreciation and Delaware Dividend Growth Income Fund, rewarded investors with double-digit 10-year annualized returns.

While the funds' balanced portfolios help keep them above water when stock prices retreat, their returns also tend to lag during bull markets.

Since we put more weight on recent performance, this investment mix has also tended to lower their ratings in recent years as stocks have soared.

Consequently, only the First Eagle Overseas Fund and the T. Rowe Price Capital Appreciation Fund earned scores of B or above, which equate to a buy recommendation from TheStreet.com Ratings.
No Minus Signs in Sight
Equity and hybrid funds with 10 straight calendar years of positive returns
Ticker NAME 2006 Return 10-Yr Annual Return Pct. Stocks** TSC Rating***
EAAFX Evergreen Asset Allocation A * 11.32% 9.72% 61.8% C
SGOVX First Eagle Overseas Fund A * 22.29% 15.89% 70.0% A+
GABCX Gabelli ABC Fund 11.97% 7.23% 53.8% C-
ITCSX ING T. Rowe Price Cap App S * 14.54% 12.24% 62.0% C+
EXDAX Manning & Napier Consrv Term Series 8.65% 6.68% 27.8% C
PRPFX Permanent Portfolio Fund 13.82% 8.82% 65.0% C+
PRWCX T. Rowe Price Cap Appreciation Fd * 14.55% 12.16% 67.2% A-
VASIX Vanguard LifeStrategy Income Fd 7.93% 6.85% 30.1% C-
SAUPX WM Flexible Inc Portfolio A * 6.70% 6.46% 48.1% C-
* Multiclass fund.
** As of latest public disclosure
*** Based on performance through November
Source: Bloomberg and TSC Ratings

Widows is a financial analyst for TheStreet.com Ratings. Prior to joining TheStreet.com, Widows was senior product manager for quantitative analytics at Thomson Financial. After receiving an M.B.A. from Santa Clara University in California, his career included development of investment information systems at data firms, including the Lipper division of Reuters. His international experience includes assignments in the U.K. and East Asia.