10 Best-Performing Mutual Funds of 2011

BOSTON ( TheStreet) -- Mutual funds that buy shares of health-care and real-estate companies leapfrogged those that own gold and energy stocks to become the best performers so far this year.

Health-care funds are far and away the winners at the midway point this year, with an average return of 12.9% through June 22, including a 9.2% run-up over the past three months, according to fund tracker Morningstar. Real-estate-focused funds have risen 9% this year, utilities funds have climbed 6.8% and consumer-staples funds have increased 5.2%. The benchmark S&P 500 Index is up 3.3%.

Defensive stocks -- health care, consumer staples and utilities, among others -- tend to do well because those companies sell necessities that aren't affected as much by a weak economy. Funds with big bets on gold and energy dominated the rankings list earlier in the year with first-quarter gains of 10%, but as the economic recovery sputtered, investors shifted to defensive stocks.

Whereas growth companies such as Apple ( AAPL), Micron Technology ( MU) and NVIDIA ( NVDA) were technology darlings earlier in the year, for the past three months the stars have been real estate investment trust SL Green Realty ( SLG), up 26% this year; health-insurance company UnitedHealth ( UNH), up 44%; and biotechnology firm Biogen-Idec ( BIIB), up 48%.

Here are 10 top-performing mutual funds in a variety of sectors and their top stock picks:

Fidelity Select Medical Delivery ( FSHCX), with assets of $899 million, is up 17.6% this year, including a 6.9% gain over the past three months.

The fund's top holding is Medco Health Solutions ( MHS), at 10% of the portfolio, followed by Express Scripts ( ESRX), at 8.8%, and UnitedHealth Group ( UNH), at 7%.

The top two picks are both big pharmacy-benefits managers that have poor-performing stocks this year. Medco Health, the nation's largest in that segment, is down 10.5%, while Express Scripts is little changed.

But UnitedHealth, a health-insurance provider, has jumped 44.2% this year.

The best performer among the fund's top 25 stocks is Sunrise Senior Living ( SRZ), an operator of 350 senior-living communities. Its shares are up 58% this year.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

The $409 million Hartford Global Health Fund ( HGHAX) has risen 16.2% this year, including 11.3% over the past three months.

Its top pick is health-insurance provider UnitedHealth, at 6.3% of the fund, followed by McKesson ( MCK), at 5.6%, and big drugmaker Pfizer ( PFE), at 4.4%.

McKesson, up 18.6% this year, is a distributor of pharmaceuticals, specialty drugs, medical and surgical supplies, and health- and beauty-care products. And it sells software for pharmacy services, medical records, patient care and financial management.

The top performer in the fund's 25 largest holdings is Abiomed ( ABMD), with a return of 72%. The company is a maker of medical devices that aid the performance of the human heart.


BlackRock Healthcare ( MAHCX), a $336 million fund, is up 15.5% this year and 7.8% in the past three months.

WebMD Health ( WBMD) is the largest holding at 6% of the fund. It is down 10% this year. The company runs specialized Web sites that provide health information to consumers and health-care professionals, and it develops and runs private Web sites for health-care providers.

Warner Chilcott ( WCRX), the second-largest fund holding at 6%, is up 5.7% this year. The company develops specialty pharmaceuticals, including for gastroenterology, dermatology and urology products. Its 2009 acquisition of Procter & Gamble's ( PG) pharmaceutical unit boosted its drug-making potential.

The top performer in the top 25 holdings is health-insurance giant Aetna ( AET), up 45.6% this year.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

The $34 million Kinetics Medical No Load Fund ( MEDRX) has climbed 13.8% this year, including a particularly strong three-month gain of 12.8%.

Its largest holding, Biogen Idec ( BIIB), at 8.9% of the fund, is up 48% this year. The company is a drug developer with a wide range of products.

Novartis ( NVS), at 6.2% of the fund, is up 5.9% this year. Its business includes branded and generic pharmaceuticals, vaccines and consumer products.

Life Technologies ( LIFE), at 6.1% of the portfolio, is down 4.9% this year. It develops biotechnology tools.


Alpine Realty Income & Growth ( AIGYX) is up 13.2% this year, including a 6.3% gain over the past three months. It invests primarily in real estate investment trusts (REITs).

Its largest holding, Simon Property Group ( SPG), at 6.5% of the fund, has jumped 16.4% this year. The company is the largest retail REIT in the U.S., and its portfolio includes shopping malls, premium outlet centers and international properties. Its holdings recently included 393 properties, about half of which were wholly owned.

Boston Properties ( BXP), which makes up 5.6% of the fund, has risen 24.6% this year. It owns over 100 office buildings in major cities as well as at least 20 office and technical properties, a hotel, as well as residential and retail properties.

Vornado Realty Trust ( VNO), at 5% of the fund, is up 13.6% this year. It owns mostly office properties in New York and Washington D.C., and shopping malls and retail properties nationwide.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

The $41 million Aston/Fortis Real Estate Fund ( AARIX) has gained 13% this year and 7.3% over the past three months.

Simon Property Group is its largest holding, at 12.7%, and Boston Properties makes up 7.8% of the portfolio.

Public Storage ( PSA), at 8% of the fund, is up 11.8% this year, including a 4.2% gain over the past three months. It is the largest self-storage REIT in the world with about 2,200 self-storage properties in 38 states and seven countries.

The fund's top performer is SL Green Realty ( SLG), up 26% this year. It makes up 1.4% of the portfolio. The company owns 23 Manhattan office properties and 25 suburban New York office properties, among its vast holdings.


The $74 million Virtus Small-Cap Sustainable Growth Fund ( PSGAX) is a surprise on the top-performer list, given that small-cap stocks are out of favor after a strong run-up over the past two years.

But the fund has a 15.5% return this year, including 9% over the past three months.

Its top holding is Hittite Microwave ( HITT), at 6.4% of the portfolio. Its shares are down 4% this year. The company makes integrated circuits, modules and components for radio-frequency and microwave applications.

FLIR Systems ( FLIR) is 5% of the fund and has a 10.7% return this year. It makes thermal-imaging and infrared-camera equipment for military, law enforcement and commercial applications.

LoopNet ( LOOP), at 5.3% of the fund, is up 66% this year. It operates an online marketplace called LoopNet.com, which is used to match commercial real estate sellers with buyers and landlords with tenants. The company is expected to merge with rival CoStar ( CSGP) late this year, via CoStar's $900 million acquisition of LoopNet.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

The $310 million mid-cap value fund Putnam Equity Spectrum ( PYSAX) boasts a return of 14.6% this year.

Its top holding, EchoStar ( SATS), at 15% of the fund, is up 42% this year. The company operates a digital set-top box business for use by the cable TV industry, and a satellite-services business, which owns or leases eight orbiting satellites that lease capacity to businesses and government agencies.

Dish Network ( DISH), which is 14.3% of the portfolio, is up 45% this year. It provides broadcast services to 14.2 million customers in the U.S. via a network of owned and leased satellites. It acquired video-rental chain Blockbuster out of bankruptcy this year.

United Continental Holdings ( UAL), at 6.4% of the fund, is up 0.7% this year. It is the largest U.S. airline and operates nearly 6,000 daily flights, domestically and internationally.


The $991 million Delaware Smid Cap Growth Fund ( DFCIX) has advanced 14.2% this year, including 3.9% over the past three months.

Weight Watchers International ( WTW), at 6.5% of the fund, is its largest holding. Its shares are up 95% this year. The company offers a variety of weight-management products and services that encourage healthy weight loss through exercise, nutrition and portion control.

Polycom ( PLCM), the second-largest holding of the fund at 5.3%, is up 51% this year. It makes voice- and video-communications equipment.

Shares of Terradata ( TDC), which make up 2.4% of fund assets, are up 40% this year. The company is focused on developing and commercializing data warehousing solutions for large corporations and government agencies.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

The $38 million Rydex Utilities Investor Fund ( RYUIX) has edged up 8.9% this year and 20.5% over the past 12 months.

Southern Co.. ( SO) is the fund's top holding, at 3.3%. It is up 5.9% this year. The company generates and distributes electricity to more than 4.4 million customers through its electric utilities in Alabama, Georgia, Florida and Mississippi. Power comes from company-owned plants.

Dominion Resources ( D), at 3% of the fund, is up 14% this year. It is an integrated energy company that provides electricity to utility and merchant customers. It also owns gas and electric transmission lines and a liquid natural gas import terminal. The stock has a 4.1% dividend yield.

Exelon ( EXC), at 3% of the fund, is up 2.2% this year. It's the parent of the utilities Commonwealth Edison of Illinois and PECO of Pennsylvania. It distributes electricity and natural gas to 5.4 million customers and owns 11 nuclear plants that generate 80% of its power.
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.