Stocks' Last-Minute Summer Fling


By Amey Stone August was a month of downs-and-ups for fund investors. Stocks fell sharply early on, thanks to spiking oil prices and surprisingly weak jobs news. They bounced back midmonth when investors started to think oil prices would fall, summer economic weakness would prove temporary, and stocks were cheap. By the end of the month, the average diversified equity fund was down just 0.7%, while the Standard & Poor's 500 had eked out a 0.4% gain, according to data from S&P. (For complete results of more than 5,000 funds, see BW Online's Interactive Mutual Fund Scoreboard.)

International funds fared far better than domestic, climbing 0.9% on average in August. Funds that focus on emerging markets did the best, gaining 3.7%. Latin America was a bright spot, with funds that invest there jumping 4.2%. Those that invest in the Pacific Rim (not including Japan) gained 2.7%, and Korea sector funds were standouts. For example, Matthews Korea (MAKOX), up 9.1%, was the fifth-best performing fund of the month. Fidelity Advisor Korea A (FAKAX) was ranked sixth, with an 8.7% gain.

HIGH-TECH LOWS. Domestic funds that look for value fared better than those that seek earnings growth. Large-cap value portfolios gained 0.7%, while large-cap growth funds fell 0.8%. Funds that invest in smaller stocks were generally hit harder than large-cap funds. In the small-cap arena, growth funds fell 2.9% and value funds slipped 0.6%.

Defensive sectors did the best in August. Real estate gained 7% as the housing boom continued apace and mortgage rates dipped. Precious metals funds climbed 6.5% as gold and other commodities continued to rise. Profunds boasted the top two performing funds overall in August: Precious Metals Ultrasector (PMPIX) climbed 12.7%, and Real Estate Ultrasector (REPIX) climbed 12.1%. PIMCO Real Estate Real Return Strategy (PRRSX) came in third, with an 11.4% gain.

Technology was the worst-performing sector-fund category in August, falling 4.4%. ProFunds Semiconductor Ultrasector (SMPIX) fared the worst in that sector, tumbling 16.7%. Communications funds fell an average of 1%. The worst performer of that group was Seligman Communications & Information A (SLMCX), which dropped 5.3%.

LONG WAS BEST. Fixed-income funds delivered strong gains in August, rising 1.6% on average. That was a little weaker than the Lehman Bros. Aggregate Bond Index, which rose 1.9%. The longest-term bond funds fared the best. Long-bond funds climbed 2.6%, and long-term government bond funds climbed 3%. American Century Target Maturity 2030 (ACTAX) was the best-performing bond fund overall, with a 6.9% gain. Emerging-market bond funds were also standouts, however, climbing 4.3% on average. The best performer in that group was JPMorgan Fleming Emerging Markets Debt (JEMDX), up 5.2%.

In August, fund investors fared decently taking risk -- as long as they placed their bets overseas. Domestic investors did best if they stayed on the defensive.

The A-List Funds

Fund

5-Year Annualized Pretax Return (%)

ABN AMRO Mid Cap N

14.9

ABN AMRO Real Estate N

16.5

AIM Real Estate A

19.1

AXP Precious Metals A

16.3

Aegis Value

18.4

Al Frank

17.7

AllianceBernstein Real Est Invstmnt Adv

17.1

AllianceBernstein Real Est Invstmnt Instl I

16.1

Alpine Realty Income & Growth Y

19.7

Alpine US Real Estate Equity Y

23.4

Amer AAdvantage Small Cap Value Instl

16.9

Amer Century Glbl Gold Inv

17.9

Amer Century Real Estate Inv

17.9

Amer Century Sm Cap Vl Inv

17.3

Amer Century Sm Company Inv

14.8

Ariel

13.5

Armada Small Cap Value I

15.5

Artisan Small Cap Value

14.8

Berwyn

13.4

Bjurman Barry Micro Cap Growth

22.6

BlackRock International Opportunities Inv A

15.4

Boston Partners Small Cap Value II Invest

22.2

Brazos Real Estate Securities Y

16.3

Bridgeway Aggressive Investors 1

13.8

Bridgeway Micro Cap Limited

17.0

Bridgeway Ultra Small Company

29.4

Bridgeway Ultra Small Company Market

23.6

Bruce

28.9

Buffalo Small Cap

19.3

Burnham Financial Serv A

27.2

CGM Focus

28.9

CGM Realty

22.6

CRM Small Cap Value Instl

15.6

Calamos Growth A

15.5

Cohen & Steers Equity Income C

16.7

Cohen & Steers Realty Shares

17.8

Cohen & Steers Special Equity

21.7

Columbia Acorn Z

13.1

Columbia Real Estate Equity Z

15.4

Columbia Small Cap Z

13.7

Constellation Clover Small Cap Value I

14.5

Davis Real Estate A

16.4

Delafield

16.2

Delaware RE Inv Tr A

17.1

Diamond Hill Bank & Financial A

16.8

Driehaus International Discovery

14.8

EII Realty Securities Instl

15.5

Eaton Vance Asian Small Companies A

16.6

Emerald Select Banking & Finance A

17.4

Evergreen Precious Metals A

24.3

Excelsior Real Estate

16.4

F Russell Real Estate Securities S

17.7

FBR Small Cap

17.5

FBR Small Cap Financial

21.4

FMC Strategic Value

14.7

FMI Focus

13.2

FMI Sasco Contrarian Value

13.8

Fidelity Canada

14.9

Fidelity Low Priced Stock

16.1

Fidelity Real Estate Investment

18.0

Fidelity Select Construction & Housing

13.7

Fidelity Select Gold

15.9

Fidelity Select Home Finance

14.7

Fidelity Select Medical Delivery

14.2

Fidelity Select Medical Systems & Equipment

15.1

Fifth Third Micro Cap Value Instl

16.8

First American Real Estate Securities Y

18.1

First American Small Cap Growth Opport Y

15.9

First Eagle Global A

15.8

First Eagle Gold A

26.1

First Eagle Overseas A

15.5

Forward Uniplan Real Estate Investment

15.3

Franklin Gold & Precious Metals A

15.8

Franklin Microcap Value

16.6

Franklin Real Estate Sec A

16.5

Fremont Real Estate

14.3

GMO REIT III

15.8

Gabelli Gold AAA

23.7

Gabelli Westwood Realty AAA

16.6

Goldman Sachs Real Estate Sec A

17.4

Goldman Sachs Small Cap Value A

15.2

Harris Insight Small Cap Value N

14.8

Heartland Value

15.9

Heartland Value Plus

13.9

Heitman REIT Adv

16.4

Hennessy Cornerstone Growth

14.8

Hotchkis & Wiley Mid-Cap Value I

20.2

Hotchkis & Wiley Small Cap Value I

21.6

iShares MSCI Austria Index

14.4

ICON Energy

19.7

ICON Financial

13.7

IMS Capital Value

13.7

ING Precious Metals

16.5

ING Russia A

39.0

INVESCO Gold & Precious Metals Inv

16.1

Ivy European Opportunities A

15.8

Ivy Global Natural Res A

16.6

Ivy Real Estate Securities A

17.2

JPMorgan Mid Cap Value I

16.9

Janus Mid Cap Value Inv

17.0

Janus Small Cap Value Inv

13.7

Jennison Health Sciences B

16.2

Jennison Natural Resources A

17.1

Lord Abbett Small Cap Value A

14.8

Matthews Asian Growth & Income

16.3

Meridian Growth

14.9

Meridian Value

15.4

Merrill Lynch Global Small Cap C

13.5

Merrill Lynch Value Opportunities B

13.9

Morgan Stanley Instl US Real Estate A

16.7

Morgan Stanley Real Estate B

15.5

Mosaic Equity Tr Mid Cap

13.8

Munder Real Estate Eq Invmnt B

14.9

Munder Small Cap Value Y

17.1

Neuberger Berman Genesis Inv

15.7

N/I Numeric Investors Small Cap Value

21.1

OCM Gold

20.8

Oakmark Global

15.6

Oakmark Select I

13.2

Oberweis Micro Cap

14.9

One Group Small Cap Value I

16.0

Oppenheimer Developing Markets A

15.6

Oppenheimer Gold & Special Minerals A

16.4

PIMCO PEA Renaissance A

14.4

PIMCO RCM Biotechnology D

14.7

PIMCO RCM Global Healthcare D

13.7

Pacific Capital Small Cap Y

18.0

Perkins Discovery

16.4

Perritt Micro Cap Opportunities

20.0

Phoenix-Duff & Phelps Real Estate Sec A

19.8

Phoenix-Seneca Equity Income A

15.0

Pioneer Real Estate Shares A

16.2

Principal Real Estate Securities A

17.7

RS Global Natural Resources

15.1

RS Partners

22.3

Royce Low Priced Stock

17.0

Royce Micro-Cap Inv

16.0

Royce Opportunity Inv

17.8

Royce Pennsylvania Mutual Inv

13.7

Royce Premier

13.3

Royce Select

15.4

Royce Special Equity

16.0

SAFECO Small Cap Value Inv

14.7

STI Classic Small Cap Value Equity L

13.6

Schroder Capital US Opportunities Inv

14.2

Scudder Gold & Precious Metals S

25.3

Security Capital US Real Estate

17.0

Security Mid Cap Value A

15.0

Sentinel Small Company A

15.0

Smith Barney Small Cap Value A

14.5

Spirit of America Real Estate A

16.7

State Street Research Aurora A

16.9

State Street Research Global Resources A

25.1

Strategic Partners Real Estate Securities B

18.7

Stratton Monthly Dividend REIT

16.6

Stratton Small Cap Value

13.2

Strong Advisor Small Cap Value Z

18.3

Strong Mid Cap Disciplined

16.8

T Rowe Price Mid-Cap Value

14.0

T Rowe Price Real Estate

18.1

T Rowe Price Small Cap Value

16.1

TAMARACK Enterprise S

15.6

TAMARACK Microcap Value S

13.6

TCW Galileo Value Opportunities I

15.3

Third Avenue Real Estate Value

20.2

Third Avenue Small Cap Value

14.5

Third Millennium Russia

31.3

Tocqueville Gold

24.4

Tocqueville Small Cap Value

13.2

Turner Micro Cap Growth

24.4

US Global Accolade Eastern European

21.6

US Global Inv Global Resources

17.1

US Global Inv Gold Shares

15.7

US Global Inv World Prec Minerals

15.4

USAA Precious Metals & Minerals

24.5

Undiscovered Managers Behavioral Vl Instl

15.2

Undiscovered Managers REIT Instl

18.7

Van Eck Intl Investors Gold A

16.0

Van Kampen Real Estate Securities A

15.7

Vanguard Energy

14.0

Vanguard Precious Metals

19.7

Vanguard REIT Index

16.7

Victory Real Estate A

15.2

Wasatch Core Growth

16.8

Wasatch Micro Cap

24.2

Wasatch Small Cap Growth

13.1

Wasatch Small Cap Value

20.8

Wells Fargo Small Cap Opportunities I

14.5

Wells S&P REIT Index A

16.1

Stone is a senior writer at BusinessWeek Online and covers the markets as a Street Wise columnist


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