Funds: A Fast Finish in October


By Amey Stone The run-up to the election wasn't kind to mutual-fund investors, with a nervous October creating lots of swings in the stock market. For most of the month stocks traded down as oil prices spiked, companies posted third-quarter earnings growth that was less than stellar, and the race for the Presidency remained disarmingly close.

If it weren't for a sharp drop in oil prices during October's last days, market averages would have been in the red for the month. But thanks to the oil-related boost, U.S. diversified equity funds posted a 1.6% gain for October, a bit better than the S&P 500-stock index, which climbed 1.5%, according to data from Standard & Poor's. (For complete results for more than 5,000 funds, see BW Online's Interactive Mutual Fund Scoreboard.)

Of equity diversified funds, the best investment strategy was mid-cap growth, in which investors look for midsize companies that have strong earnings. That group of funds climbed 2.7%. Small-cap growth funds did almost as well, gaining 2.3%. Value funds, where managers buy stocks of companies that are cheap, fared poorly in comparison to growth funds. It didn't matter what size companies value investors focused on: Small-cap value funds rose just 1%, large-cap value funds gained 1.2%, and mid-cap value funds picked up 1.3%.

AILING HEALTH CARE. Of the sector funds, technology fared by far the best in October, climbing 5.6% on average, thanks to strong earnings for companies like Apple (AAPL), eBay (eBay), Texas Instruments (TXN), and Sun Microsystems (SUNW). Communications funds also performed well, rising 5.2%. ProFunds scored big with its Internet Ultrasector (INPIX), up 13.9, and Semiconductor Ultrasector (SMPIX), up 12%. An exchange-traded fund, iShares Goldman Sachs Software Index (IGV), came in next with a 10.2% gain, followed by Jacob Internet (JAMFX), up 10.1%.

The worst-performing sector was health care, which fell 1.7% in October on worries that John Kerry would win the election and promote policies that would hamper the industry's profitability. The only other sector in the red for October was natural resources, which fell 0.1%. That sector, up 40% in the prior 12 months, slipped as commodities prices fell in late October.

On the fixed-income side, taxable bond funds gained 0.9%, while municipal bond funds rose 0.7%. International bond funds were the standouts, climbing an average of 2.3% in October. Morgan Stanley International Fixed Income Institutional (MPIFX) was the top-performer, up 3.9%. Evergreen International Bond (ESIYX) was second best, returning 3.8%.

HEIGHTENED ANXIETY. Emerging-markets bond funds did almost as well, up 1.8% on average. Extra-safe "ultrashort" bond funds ranked last among fixed-income categories but still did the job, gaining 0.2% in October.

October was a scary month for fund investors, in which sharp market swings heightened anxiety. But in the end, both stock and bond investors fared well.

The A-List Funds

Fund

Ticker

5-Year Annualized Pretax Return (%)

ABN AMRO Mid Cap N

CHTTX

16.4

ABN AMRO Real Estate N

ARFCX

19.7

AIM Energy Inv

FSTEX

16.2

AIM Gold & Precious Metals Inv

FGLDX

16.9

AIM Real Estate A

IARAX

22.3

AXP Precious Metals A

INPMX

17.2

Aegis Value

AVALX

19.4

Al Frank

VALUX

18.4

AllianceBernstein Real Est Invstmnt Adv

ARSYX

20.1

AllianceBernstein Real Est Invstmnt Instl I

ARIIX

19.1

Alpine Realty Income & Growth Y

AIGYX

22.7

Alpine US Real Estate Equity Y

EUEYX

27.9

Amer AAdvantage Small Cap Value Instl

AVFIX

20.0

Amer Century Glbl Gold Inv

BGEIX

18.2

Amer Century Real Estate Inv

REACX

20.5

Amer Century Sm Cap Vl Inv

ASVIX

20.1

Amer Century Sm Company Inv

ASQIX

16.1

Ariel

ARGFX

16.5

Armada Small Cap Value I

AMRIX

17.3

Artisan Small Cap Value

ARTVX

16.7

Berwyn

BERWX

16.9

Bjurman Barry Micro Cap Growth

BMCFX

22.4

Bogle Small Cap Growth Inv

BOGLX

17.0

Boston Partners Small Cap Value II Invest

BPSCX

23.9

Brazos Real Estate Securities Y

BJRSX

18.5

Bridgeway Micro Cap Limited

BRMCX

17.5

Bridgeway Ultra Small Company

BRUSX

31.0

Bridgeway Ultra Small Company Market

BRSIX

24.8

Bruce

31.2

Buffalo Small Cap

BUFSX

22.9

Burnham Financial Serv A

BURKX

27.0

CGM Focus

CGMFX

31.6

CGM Realty

CGMRX

25.4

CRM Small Cap Value Instl

CRISX

17.8

Cohen & Steers Realty Focus Instl

CSSPX

22.6

Cohen & Steers Realty Income C

CSCIX

18.6

Cohen & Steers Realty Shares

CSRSX

20.6

Columbia Real Estate Equity Z

CREEX

18.0

Columbia Small Cap Z

SMCEX

15.8

Constellation Clover Small Cap Value I

TCSVX

15.0

Davis Real Estate A

RPFRX

19.1

Delafield

DEFIX

17.7

Delaware RE Inv Tr A

DPREX

19.7

Diamond Hill Bank & Financial A

BANCX

18.2

EII Realty Securities Instl

EIIRX

18.6

Emerald Select Banking & Finance A

HSSAX

19.9

Evergreen Precious Metals A

EKWAX

24.4

Excelsior Real Estate

UMREX

19.0

F Russell Real Estate Securities S

RRESX

20.6

FBR Small Cap

FBRVX

19.1

FBR Small Cap Financial

FBRSX

23.0

FMC Strategic Value

18.6

FMI Common Stock

FMIMX

14.7

FMI Sasco Contrarian Value

FMIVX

16.5

Fidelity Canada

FICDX

16.3

Fidelity Low Priced Stock

FLPSX

18.3

Fidelity Real Estate Investment

FRESX

21.0

Fidelity Select Gold

FSAGX

15.2

Fidelity Select Medical Delivery

FSHCX

18.6

Fidelity Select Medical Systems & Equipment

FSMEX

18.0

Fifth Third Micro Cap Value Instl

MXAIX

18.8

First American Real Estate Securities Y

FARCX

21.3

First American Small Cap Growth Opport Y

FIMPX

15.0

First Eagle Global A

SGENX

16.3

First Eagle Gold A

SGGDX

24.3

First Eagle Overseas A

SGOVX

16.1

Forward Uniplan Real Estate Investment

FFREX

17.9

Franklin Gold & Precious Metals A

FKRCX

16.5

Franklin Microcap Value

FRMCX

19.2

Franklin Real Estate Sec A

FREEX

19.4

Fremont Real Estate

FREFX

16.7

GMO REIT III

GMORX

18.6

Gabelli Gold AAA

GOLDX

22.4

Gabelli Westwood Realty AAA

WESRX

19.3

Goldman Sachs Mid Cap Value A

GCMAX

16.1

Goldman Sachs Real Estate Sec A

GREAX

20.2

Goldman Sachs Small Cap Value A

GSSMX

19.2

Harris Insight Small Cap Value N

HSVAX

17.5

Heartland Value

HRTVX

19.3

Heartland Value Plus

HRVIX

16.7

Heitman REIT PBHG

PBRTX

19.2

Hennessy Cornerstone Growth

HFCGX

15.3

Hotchkis & Wiley Mid-Cap Value I

HWMIX

22.5

Hotchkis & Wiley Small Cap Value I

HWSIX

26.7

iShares MSCI Austria Index

EWO

18.2

ICON Energy

ICENX

25.3

ICON Healthcare

ICHCX

15.5

ING Precious Metals

LEXMX

16.4

ING Russia A

LETRX

45.2

Ivy European Opportunities A

IEOAX

16.9

Ivy Global Natural Res A

IGNAX

18.5

Ivy Real Estate Securities A

IRSAX

20.0

J Hancock Classic Value A

PZFVX

16.4

James Advantage Small Cap

JASCX

15.1

Janus Mid Cap Value Inv

JMCVX

17.8

Janus Small Cap Value Inv

JSCVX

14.9

Jennison Health Sciences B

PHLBX

15.1

Jennison Natural Resources A

PGNAX

19.8

Kensington Strategic Realty A

KSRAX

23.1

Lord Abbett Mid Cap Value A

LAVLX

16.2

Lord Abbett Small Cap Value A

LRSCX

17.8

MainStay Small Cap Value B

MSPBX

15.3

Matthews Asian Growth & Income

MACSX

17.6

Matthews China

MCHFX

15.0

Meridian Growth

MERDX

15.1

Meridian Value

MVALX

16.0

Merrill Lynch Natural Resources A

MDGRX

16.6

Morgan Stanley Instl European Real Estate A

MSUAX

17.8

Morgan Stanley Instl US Real Estate A

MSUSX

19.7

Morgan Stanley Real Estate B

REFBX

18.4

Munder Real Estate Eq Invmnt B

MURBX

18.0

Munder Small Cap Value Y

MCVYX

18.9

Neuberger Berman Genesis Inv

NBGNX

18.1

n/i numeric investors Small Cap Value

NISVX

23.9

OCM Gold

OCMGX

20.6

Oakmark Global

OAKGX

18.2

Oberweis Micro Cap

OBMCX

15.2

One Group Small Cap Value I

PSOPX

17.5

Oppenheimer Developing Markets A

ODMAX

16.5

Oppenheimer Gold & Special Minerals A

OPGSX

17.5

Oppenheimer Real Asset A

QRAAX

18.6

PIMCO NFJ Small Cap Value A

PCVAX

16.2

PIMCO PEA Renaissance A

PQNAX

17.0

Pacific Advisors Small Cap A

PASMX

16.5

Pacific Capital Small Cap Y

PSCYX

21.0

Perkins Discovery

PDFDX

15.6

Perritt Micro Cap Opportunities

PRCGX

23.6

Phoenix-Duff & Phelps Real Estate Sec A

PHRAX

22.8

Phoenix-Seneca Equity Income A

REALX

18.1

Pioneer Real Estate Shares A

PWREX

19.1

Principal Real Estate Securities A

PRRAX

20.3

Putnam Small Cap Value A

PSLAX

17.0

RS Contrarian Value

RSCOX

15.3

RS Global Natural Resources

RSNRX

20.1

RS Partners

RSPFX

26.0

Royce Low Priced Stock

RYLPX

19.5

Royce Micro-Cap Inv

RYOTX

18.1

Royce Opportunity Inv

RYPNX

19.3

Royce Pennsylvania Mutual Inv

PENNX

16.2

Royce Premier

RYPRX

15.6

Royce Select

RYSFX

17.0

Royce Special Equity

RYSEX

18.3

SAFECO Small Cap Value Inv

SFSCX

15.8

STI Classic Small Cap Value Equity L

STCEX

17.1

Saratoga Small Capitalization I

SSCPX

14.7

Schroder Capital US Opportunities Inv

SCUIX

15.9

Scudder Gold & Precious Metals S

SCGDX

26.2

Security Capital US Real Estate

SUSIX

19.8

Security Mid Cap Value A

SEVAX

18.0

Sentinel Small Company A

SAGWX

16.2

Smith Barney Small Cap Value A

SBVAX

16.8

Spirit of America Real Estate A

SOAAX

19.0

State Street Research Aurora A

SSRAX

17.9

State Street Research Global Resources A

SSGRX

31.1

Strategic Partners Real Estate Securities B

PURBX

21.7

Stratton Monthly Dividend REIT

STMDX

18.4

Stratton Small Cap Value

STSCX

15.7

Strong Advisor Small Cap Value Z

SSMVX

20.8

Strong Mid Cap Disciplined

SMCDX

17.4

T Rowe Price Mid-Cap Value

TRMCX

15.2

T Rowe Price Real Estate

TRREX

21.1

T Rowe Price Small Cap Value

PRSVX

18.5

TAMARACK Enterprise S

TETSX

18.6

TAMARACK Microcap Value S

TMVSX

16.2

TCW Galileo Opportunity N

TGONX

15.5

TCW Galileo Value Opportunities I

TGVOX

17.9

Texas Capital Value & Growth

TCVGX

16.4

Third Avenue Real Estate Value

TAREX

21.7

Third Avenue Small Cap Value

TASCX

15.6

Third Millennium Russia

TMRFX

37.8

Tocqueville Gold

TGLDX

23.5

Turner Micro Cap Growth

TMCGX

22.3

US Global Accolade Eastern European

EUROX

28.2

US Global Inv Global Resources

PSPFX

22.4

US Global Inv Gold Shares

USERX

16.0

US Global Inv World Prec Minerals

UNWPX

16.5

USAA Precious Metals & Minerals

USAGX

23.4

Undiscovered Managers Behavioral Vl Instl

UBVLX

15.8

Undiscovered Managers REIT Instl

URTLX

21.4

Van Eck Intl Investors Gold A

INIVX

18.6

Van Kampen Real Estate Securities A

ACREX

18.7

Vanguard Energy

VGENX

18.0

Vanguard Precious Metals

VGPMX

20.2

Vanguard REIT Index

VGSIX

19.4

Victory Real Estate A

VREIX

17.5

Vontobel Eastern European Equity

VEEEX

18.9

Wasatch Core Growth

WGROX

17.5

Wasatch Micro Cap

WMICX

26.3

Wasatch Small Cap Value

WMCVX

23.1

Wells Fargo Small Cap Opportunities I

NVSOX

16.2

Wells S&P REIT Index A

WSPAX

18.9

Yacktman

YACKX

16.1

Stone is a senior writer for BusinessWeek Online in New York


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