It's official: There are eight diversified U.S. mutual funds that just marked their ninth year beating their benchmark indexes, according to data from Morningstar. Here's a look at these funds, which I also wrote about last month , their top holdings and what some of the managers are thinking about the coming year.
This elite group -- each fund had to beat a benchmark index every year since 1999 -- contains five large-blend funds, two large-growth funds and one small-growth fund. Among the large-blend funds, ( HIACX) Hartford Capital Appreciation HLS performed best, garnering a 16.8% return during 2007, while the Russell 1000 returned only 5.8%. ( ANCFX) American Funds Fundamental Investors posted a return of 13.6%, ( PRSGX) T. Rowe Price Spectrum Growth was at 8.7%, ( RELEX) Russell LifePoints Equity Growth Strategy nabbed 7.4% and ( PHGAX) Target Growth Allocation clocked in with a 6.2% return. Ned Notzon, manager of T. Rowe Price Spectrum Growth, which invests in other mutual funds, says his crew benefited from having implemented a couple of years ago a move to large-cap and growth stocks. "At our last meeting, we lowered our allocation of high-yield a little more," he said. The Russell offering is also a fund of funds, and manager Jill Johnson credits Russell's "ability to research managers and pick the best of the breed form the group" for its outperformance of its peers.