Funds Get a Boost from the Fed


The Federal Reserve came to the rescue in November. The central bank cut short-term rates a half percentage point on Nov. 6 to jump-start the economic recovery, which it said had hit a "soft patch." That move also jump-started the stock market. The Standard & Poor's 500-stock index gained 5.9% in November, and the average diversified U.S. stock fund did a notch better, with a 6% gain (see BW Online's Interactive Mutual Fund Scoreboard for complete results of more than 4,000 funds).

The stock market's riskiest sectors performed the best in November. Technology and communications funds soared, gaining 17.3% and 13.7%, respectively. One exchange-traded fund, iShares Goldman Sachs Networking Index (IGN), was up 41% -- making it the top-performing fund in November. Firsthand Technology Innovators (TIFQX) rose 35%. Still, both funds are down more than 30% for the year.

Small-cap funds also fared especially well in November, gaining 7% on average. Large-cap funds, with an average gain of 5%, underperformed the S&P. Emerging markets funds gained 6.3% on average, while international and world funds gained 4.5%.

COMING UP SHORT. No equity-fund categories were in the red in November, but precious-metals funds brought up the rear, gaining only 1.1%. The beleaguered health-care sector picked up just 2.6%. The worst-performing stock funds, not surprisingly, were those that short stocks. Both ProFunds UltraShort OTC (USPSX) and Rydex Dynamic Venture (RYVNX) fell 25% in November (however, year-to-date they're up 18% and 20%, respectively).

In similar fashion to the equity funds, the riskiest bond-fund groups performed the best. Convertible and high-yield funds had stellar one-month results, up 8% and 9%, respectively. Fidelity Advisor High Income Advantage (FAHDX), a junk-bond fund, was 12.2% higher and was the top-performing bond fund in November (year-to-date it's down 8%). Harris Insight Convertible Securities (HICAX) rose 9.6% in the month (it's down 8% year-to-date).

Long-term government bond funds did the worst of fixed-income categories as mid- and long-term rates rose even while short-term rates fell thanks to the Fed's move. The worst-performing bond fund was Comstock Strategy (CPFAX), which had a 5.5% loss in November (it's up 8.8% this year). Flex-Fund U.S. Government Bond (FLXBX) lost 2% in November but is up 9.3% this year.

A-Rated Funds in November

AIM European Growth A

AIM Global Health Care A

AIM Small Cap Growth A

ARK Small Cap Equity Retail A

Advisors Inner Circle FMC Select

Amer Century Equity Inc Inv

Ameristock

Ariel

Ariel Appreciation

Armada Small Cap Value I

Artisan International

Artisan Mid Cap

Artisan Small Cap Value

BNY Hamilton Sm Cap Gr Inv

Baron Growth

Baron Small Cap

Berger Small Cap Value Inv

Bjurman Micro Cap Growth

BlackRock Intl Sm Cap Eq Inv A

Bridgeway Aggressive Investors I

Bridgeway Ultra Small Company

Bridgeway Ultra Small Company Tax Adv

CGM Focus

Calamos Growth A

California Investment S&P Mid Cap Index

Chesapeake Core Growth

Clipper

Conseco Equity Y

Delafield

Diamond Hill Bank & Financial A

Dodge & Cox Balanced

Dodge & Cox Stock

Dreyfus Index Fds Midcap Index

Dreyfus Premier Technology Growth A

Eaton Vance Wldwd Hlth Sciences A

FBR Small Cap Financial A

FBR Small Cap Value A

FMI Focus

Fenimore Equity Income

Fidelity Advisor Mid Cap T

Fidelity Export & Multinational

Fidelity Fifty

Fidelity Japan Small Co

Fidelity Low Priced Stock

Fidelity Mid Cap Stock

Fidelity New Millennium

Fidelity Select Brokerage & Investment

Fidelity Select Insurance

Fidelity Select Multimedia

Fidelity Select Software & Computer

First American MicroCap Y

First Eagle Fund Of America Y

First Eagle SoGen Global A

First Eagle SoGen Gold

First Eagle SoGen Overseas A

Fremont US Micro Cap

Fremont US Micro Cap Instl

Gabelli Gold

Gabelli Investor ABC

Growth Fund of America A

Heartland Select Value

Hennessy Cornerstone Growth

Heritage Mid Cap Stock A

Hotchkis & Wiley Mid-Cap Value I

ICON Energy

ICON Financial

ICON Healthcare

ICON Information Technology

ICON Leisure and Consumer

IMS Capital Value

ING International Small Cap Growth A

INVESCO Leisure Inv

J Hancock Classic Value A

JPMorgan Mid Cap Value I

Janus Adviser Balanced I

Janus Adviser Capital Appreciation I

Janus Aspen Cap Appreciation Instl

Janus Aspen Core Equity Instl

Janus Balanced

Jensen

Julius Baer International Equity A

Kinetics Internet

Legg Mason Eq Tr Special Invmnt Prim

Liberty Acorn Z

Longleaf Partners

Longleaf Partners Small Cap

Lord Abbett Mid Cap Value A

MFS International New Discovery A

Mairs & Power Growth

Marshall Mid Cap Value Inv

Matrix Advisors Value

Matthew 25

Matthews Asian Growth & Income

Matthews Korea

Meridian Growth

Meridian Value

Merrill Lynch Global Small Cap B

Merrill Lynch Healthcare B

Merrill Lynch Master Small Cap Value B

Morgan Stanley Health Sciences Trust B

Morgan Stanley Instl Small Company Gr B

Mosaic Equity Tr Mid Cap

Mutual European Z

Mutual Financial Services A

Navellier Perf Mid Cap Growth

Needham Growth

Neuberger Berman Genesis Inv

North Track PSE Tech 100 Idx A

Oakmark Equity & Income I

Oakmark International Small Cap I

Olstein Financial Alert C

Osterweis

PBHG Large Cap Value

PBHG Mid Cap Value

PIMCO PEA Renaissance A

PIMCO RCM Global Health Care

Parnassus Income Equity Inc

Prudential Natural Resources A

Quaker Aggressive Growth A

RS Diversified Growth A

Reserve Private Eqty Small Cap Growth R

Rockland Small Cap Growth

Royce Low Priced Stock

Royce Opportunity Inv

Royce Pennsylvania Mutual Inv

Royce Premier

Royce Total Return

Royce Trust & Giftshares Inv

Salomon Brothers Capital II

Santa Barbara Bender Growth C

Schroder Capital Ultra Inv

Scudder Micro Cap Invest

Security Mid Cap Value A

Sentinel Small Company A

Sequoia

Smith Barney Aggressive Growth A

Standard & Poor's MidCap 400 Depositary Rcpt

State Street Research Aurora A

T Rowe Price Capital Appreciation

T Rowe Price Financial Services

T Rowe Price Health Sciences

T Rowe Price Media & Telecommunications

T Rowe Price Mid-Cap Value

TCW Galileo Value Opportunities I

Thompson Plumb Balanced

Thompson Plumb Growth

Tocqueville Small Cap Value

Touchstone Emerging Growth A

Transamerica Premier Balanced Inv

Transamerica Premier Growth Oppt Inv

Turner Small Cap Value

USAA Precious Metals & Minerals

Value Line Emerging Opportunities

Vanguard Capital Opportunity

Vanguard Health Care

Vanguard International Explorer

Vanguard Precious Metals

Vontobel US Value

WM West Coast Equity A

Waddell & Reed Adv Science & Technology A

Wasatch Core Growth

Wasatch Micro Cap

Wasatch Small Cap Growth

Wasatch Ultra Growth

Weitz Partners Value

Weitz Value

William Blair International Growth N


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