Mutual Funds - General Discussion: Funds That Keep the Streak Alive

» Normxxx - Funds That Keep the Streak Alive

By Carol Wood, BW | 16 February 2006

S&P's scorecard shows a group of mutual funds that are consistently top performers. It's a distinction relatively few can manage

Standard & Poor's has updated its scorecard measuring the consistency of top mutual-fund performers over three and five consecutive years. The semiannual scorecard also measures performance persistence, corrected for survivorship bias. It shows that most funds have trouble staying at the top of the heap in those time frames.

As of Dec. 31, 2005, only 15.5% of large-cap funds, 10.2% of midcap funds, and 9.8% of small-cap funds maintained a top-quartile ranking over three consecutive 12-month periods. The scorecard data also show that 32.2% of large-cap, 27.3% of midcap, and 25.7% of small-cap funds consistently maintained a top-half ranking over the same time period.

"Very few funds manage to maintain a consistent top-quartile ranking for long periods of time," says Srikant Dash, index strategist at Standard & Poor's. "Our study shows that over five consecutive years, only 1.9% of large-cap funds, 3.1% of small-cap funds, and no midcap funds have maintained a top-quartile ranking."

EXPERIENCED MANAGEMENT. The scorecard also evaluates the characteristics of those few funds that persistently maintain a top-half or top-quartile ranking. Standard & Poor's data show that consistent performers have longer manager tenure at their funds and lower expenses relative to their peers, and have managed to minimize or avoid losses during the bear market relative to their peers.

"When we viewed consecutive 12-month performance or non-overlapping cumulative periods, consistent top performers all had experienced management teams with tenure higher than their peers," says Rosanne Pane, mutual-fund strategist at Standard & Poor's. "Experienced management teams can successfully maneuver their funds through a variety of market environments."

Below is a list of 10 funds in each equity-fund category that showed persistent performance over five consecutive 12-month periods. The complete semiannual scorecard is available at www.standardandpoors.com.

 
LARGE-CAP FUNDS
Fund Name (ticker)	                                         Five-Year Return    Status for
                                                                 (Annualized %) New Investors
Hotchkis & Wiley Large Cap Value Fund/I (HWLIX)        13.1     Open	
Dodge & Cox Stock Fund (DODGX)                         11       Closed
RiverSource Diversified Equity Income Fund/A (INDZX)    9.8     Open
DFA U.S. Large Cap Value Portfolio III (DFUVX)          9.3     Open
American Beacon Large Cap Value/AMR (AAGAX)             9.2     Closed
LWAS/DFA U.S. High Book-to-Market Portfolio (DFBMX)     9.1     Open
Target Portfolio Trust:Large Cap Value (TALVX)          8.6     Open
Oppenheimer Value/A (CGRWX)                             7.8     Open
Cambiar Opportunity Fund (CAMOX)                        7.5     Open
Gabelli Equity Income/AAA (GABEX)                       7.1     Open
 
MIDCAP FUNDS
Fund Name (ticker)	                                         Five-Year Return    Status for
                                                                 (Annualized %) New Investors
Hotchkis & Wiley Mid Cap Value Fund/I (HWMIX)          17.7     Closed
Security: Mid Cap Value Fund/A (SEVAX)                 16.1     Open
Janus Mid Cap Value Fund/Investor (JMCVX)              13.8     Open
Vanguard Selected Value (VASVX)                        13.3     Open
Vanguard Strategic Equity (VSEQX)                      11.8     Open
BlackRock Mid-Cap Value Portfolio/Inv A (BMCAX)        11.5     Open
SEI Institutional Managed Trust Mid-Cap Fund/A (SEMCX) 11.5     Open
Robeco Boston Partners Mid Cap Value/Inst (BPMIX)      11.1     Open
Westcore Mid-Cap Value Fund (WTMCX)                    10.9     Open
Rochdale Mid/Small Value Portfolio (RIMKX)             10.9     Open
 
SMALL-CAP FUNDS
Fund Name (ticker)	                                         Five-Year Return    Status for
                                                                 (Annualized %) New Investors
Hotchkis & Wiley Small Cap Value Fund/I (HWSIX)        25       Closed
Perritt MicroCap Opportunities (PRCGX)                 24.2     Open
RS Partners Fund (RSPFX)                               23.6     Closed
n/i Small Cap Value Fund (NISVX)                       21.1     Closed
Berwyn Fund (BERWX)                                    19.9     Open
DFA U.S. Small Cap Value Portfolio/II (DFAVX)          19.4     Open
DFA U.S. Small Cap Value Portfolio (DFSVX)             19.1     Open
Pacific Capital Small Cap/Y (PSCYX)                    19.1     Open
Robeco Boston Partners Small Cap Value II/Inv (BPSCX)  18.9     Closed
MainStay Funds Small Cap Opportunity/I (MOPIX)         18.8     Open

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