(Editor's note: TheStreet today named 82 mutual funds and exchange traded funds, or ETFs, winners and runners-up in its second annual awards ceremony. A list of the funds and related articles can be found on the awards page.)NEW YORK ( TheStreet) -- During the market turmoil of 2008, prices of mortgage securities sank hard. That attracted the attention of the contrarian managers of USAA Intermediate-Term Bond ( USIBX). The fund scooped up some deeply depressed securities that carried double-digit yields. At first the bold move seemed premature. The mortgage securities continued falling, and the fund finished the year in the bottom half of its category, according to Morningstar. Then the unloved securities rallied sharply and USAA topped its average competitor by 16 percentage points in 2009. During the past three years, the fund returned 16.9% annually, outdoing 98% of its peers. The compelling performance enabled USAA to win TheStreet's Best Funds 2012 award in the category of general investment grade bond fund. The runner-up is USAA Income ( USAIX).
1. To be eligible for consideration, an open-end mutual fund needed at least a three-year history on Dec. 31, 2011, and still be accepting new assets from retail investors; for exchange traded funds, a one-year history. 2. Half of the rating is based on performance metrics, including total return minus expenses, with a weighting to give long-term performance greater emphasis. 3. The other half of the rating is based upon risk metrics, including standard deviation, size of trough-to-peak (drawdown factor), semi-standard deviation and beta. The lower the risk, the better. 4. Top and runner-up funds and ETFs were selected in a variety of categories (funds and ETF were placed in categories via Lipper data).