|
|
Get Four
|  | DECEMBER 9, 2004
By Amey Stone Big Gains for Small-Cap Funds They were the winners in the post-election market rally, while the Fed's November rate hike weighed down bond portfolios Once the Presidential election was over, it was off to the races for the stock market in November. That meant heady returns for mutual-fund shareholders. The average U.S. diversified equity fund climbed 5.4%, besting the 4% return of the S&P 500 Index. International equity funds did even better, rising 6.5% in November, according to data from Standard & Poor's. (For complete results for more than 5,000 funds, see BW Online's Interactive Mutual Fund Scoreboard.) Small caps proved the best way to play the rally. Small-company funds bested their large-cap peers in all investing styles. For example, small-cap value funds gained 8% on average, while large-cap value funds climbed 4.6%. Small-cap growth funds rose 7.1%, vs. 4.3% for their large-cap brethren. ENERGY BOOST. ProFunds Ultra Small Cap (UAPIX ) was the second-best performing mutual fund in November, with a 17.8% gain. ING Small Cap Value (IVSAX ) was the fourth-best, with a 14.2% advance. It's a rarity for any diversified equity fund to show up that high on the monthly ranking. Due to their concentrated bets and high risk, sector funds usually win out in any given month. Of sector funds, Latin America portfolios did the best, with an 8.8% return. Diversified emerging-markets funds gained 8.2%. iShares MSCI South Africa Index (EZA ) was the top emerging-markets fund, with a 13.9% return. Another country fund that performed well: iShares MSCI Austria Index (EWO ), which gained 13.1%. Those strong results were mainly related to rising energy and commodity prices and the falling dollar. Natural-resources funds also prospered, climbing 8.4% on average. State Street Research Global Resources (SSGRX ) was the top performer in that sector, with a 14.1% return. WEAK SPOT IN HEALTH. Technology and communications funds each advanced 6% on average as investors bet on a stronger economy. Hartford Global Communications (HGCAX ) was a standout, rising 15.1%. ProFunds Internet Ultrasector (INPIX ) was the top-performing technology fund, with a 14.1% gain. While no stock-fund categories did badly, health funds lagged with just a 3.3% return in November. Ironically, the top fund of all in November was from that group: Fidelity Select Medical Delivery (FSHCX ), which climbed 18.8% on the strength of its stock picking. Another weak spot was Japan. Funds that invest in Japan rose just 3.9%. In contrast, portfolios that invest in Asian countries excluding Japan gained 7.9%. RISK REWARDED. Fixed-income investors didn't fare as well as those betting on equity, since interest rates ticked up on renewed signs of inflation. On Nov. 10 the Federal Reserve's Open Market Committee decided to raise short-term rates a quarter point, to 2%. Long government bond funds were the worst performers, falling 1.6% in the month. Tax-free bond funds fell 0.8% in November, the same as the Lehman Bros. Aggregate Index. Taxable bonds fared a bit better, edging up a scant 0.1%. Fixed-income investors were rewarded for taking risk in November. Calamos Growth & Income (CVTRX ) was the top-performing bond fund (as it often is in months when stocks do well), with a 5.7% return. On average, convertibles gained 3.8%. GMO International Bond (GMIBX ) was ranked No.2 among bond funds, with a 5.3% gain. International bond portfolios have been big beneficiaries as the U.S. dollar declines against foreign currencies. Those funds climbed 2.6% on average in November. SEI International Fixed Income (SEFIX ) was another standout, with a 5.1% jump. Emerging-markets bond funds prospered as well, climbing 1.4%. After a year filled with flat markets and plenty of jitters, investors proved in November how ready they were for the prospect of renewed growth in 2005.
 Stone is a senior writer for BusinessWeek Online Edited by Patricia O'Connell
BW MALL
SPONSORED LINKS
Buy a link now!Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
 Copyright 2004, by The McGraw-Hill Companies Inc. All rights reserved.Terms of Use | Privacy Notice |
Printer-Friendly Version
