Fundline: Which funds are really big-league hitters?
— -- You can't always use top performance to measure the best fund. Market Vectors Coal kol fund, for example, is up a smokin' 52% the past three months. But such a narrowly focused fund probably won't excel over the long haul.
One way to look for a top performer is to look at its long-term average vs. its benchmark — the measure the fund itself gauges its performance against. Large-company core funds look for reasonably priced stocks of big companies with growing earnings, an approach often called GAARP — "growth at a reasonable price." The best benchmark for large-company core funds is the S&P 500-stock index.
The batting champion in the category? Columbia Large-Cap Growth legax, which has beaten the monthly performance of the S&P 500 83% of the time, according to Lipper, which tracks the funds. Columbia Large-Cap Growth has gained 75% the past decade, vs. 32% for the S&P 500.
The other big hitters:
•Davis NY Venture nyvtx, with a 79% batting average vs. the S&P 500 the past decade. It's up 72%. The fund has a 4.75% maximum sales charge, or load. But managers Chris Davis and Kenneth Feinberg also run Selected American Shares, a no-load fund.
•Victory Diversified Stock srvex, which has beaten the S&P 500 75% of the time for the past decade and gained 100% during the same period.
•Janus Fundamental Equity jaeix has beaten the S&P 500 in 73% of the past 120 months and gained 89% in that period. But the fund has a new manager, so its record may not be meaningful.
Eugene Sit, a remarkable life :
Eugene Sit, founder and chairman of Sit Investment Associates, died June 24 at age 69.
Sit's family members were landowners in China who lost the family fortune during the Communist revolution. His father died penniless, and his mother was imprisoned by the Communists. Sit and his brother immigrated to Arkansas, where he lived with relatives.
A manager for IDS Financial Services (now Ameriprise) in the 1970s, Sit founded his own fund company in 1981. It has about $8 billion in assets.
Sit also founded the Minnesotans' Military Appreciation Fund, which gives cash grants to soldiers who have fought in the Middle East since Sept. 11, 2001, and their families. "I thought, 'Wouldn't it be wonderful if we could get a group of community leaders to help the men and women making sacrifices on our behalf?' " Sit told USA TODAY in April 2007. Sit rounded up other donors, and the fund now stands at about $5.5 million.
Bond bombshells:
Investors can look back on the first half of 2008 as a time when, basically, nothing worked. Stocks tanked, and the most popular categories of bond funds were smacked. How the most popular types of bond funds fared:
•Intermediate investment grade: -0.8%.
•High-yield funds: -2.0%
•Short investment grade: -0.8%.
Bond prices fall when interest rates rise, which was part of the problem in the first half this year. The other problem was the subprime mortgage meltdown, which sent investors scurrying for ultra-safe, liquid investments, such as Treasury bills.
Fund news:
MacroShares Oil Up and MacroShares Oil Down funds had a clever proposition: If oil went up 1%, managers shifted 1% of Oil Down's assets into Oil Up, and vice versa. The fund didn't, in fact, own oil or anything else, really, except T-bills. The fund was launched when oil was $60 a barrel, according to website FundAlarm, but by the time oil hit $120, Oil Down was pumping mud. The funds dissolved instead. … Pimco, the Newport Beach, Calif., bond house, is launching the Pimco Multi-Asset fund, run by Mohammed El-Erian, who has rejoined the firm after a brief tenure as the head of Harvard's endowment fund. … Longtime star manager Nikolaos Monoyios retired as co-manager of Oppenheimer Main Street fund.
By John Waggoner