The Street's Triple Slam


By Angelina Dance Reflecting a stock market that turned negative amid rising energy prices in August, the average domestic equity fund retreated 0.9% for the month, vs. a 1.1% loss for the Standard & Poor's 500-stock index.

All domestic equity style categories ended August in negative territory. Small-cap growth funds ranked last, losing on average 1.4%, while all-cap value portfolios showed the narrowest decline, edging down 0.4%. Value-oriented funds suffered slightly less than their growth counterparts, declining 0.7%, vs. a loss of 0.9% for growth funds.

However, year-to-date, all style categories are in the black, with the mid-cap value showing the best performance with a gain of 6.4%. (For complete results of more than 5,000 funds, see BW Online's Interactive Mutual Fund Scoreboard.)

OVERALL IMPACT. August's top-performing individual equity fund, the $62-million Scudder Commodity Securities Fund/A (SKNRX), soared 9.2%. This fund invests in both the commodities markets directly (through the use of GSCI-linked notes, as well as derivative instruments) and in the stocks of companies that find, develop, or produce commodities. Launched in February of this year, the fund is managed by Theresa Gusman, Terence Brennan, and Jeffrey Saeger of Deutsche Asset Management.

As of June 30, the Scudder fund had 56% of its assets invested in energy and 42% in materials. The top five holdings comprised Exxon Mobil (XOM), 4.4%; Dow Chemical (DOW), 2.3%; Shell Transport & Trading Co., 2.2%; BP (BP), 2.2%; and Chevron (CVX), 2.0%.

While the energy sector flourishes amid historic high crude oil prices, the remaining parts of the market are worried about the impact of these high prices on overall economic growth. Indeed, aside from the booming energy sector, all of the S&P 500 GICS Sectors posted broad losses for the month, with materials (-5.3%), telecommunication services (-4.8%), and consumer discretionary (-4.2%) incurring the biggest declines.

OIL WATCH. At the very end of the month, Hurricane Katrina pounded the coast of the Gulf of Mexico with devastating force, causing catastrophic damage and thousands of estimated deaths in Louisiana, Mississippi, and Alabama. The Insurance Information Institute estimates that claims arising from the hurricane could top $25 billion, potentially making it the costliest storm in U.S. history.

Despite the fears raised by Katrina, Standard & Poor's Investment Policy Committee (IPC) believes the resilience of the U.S. equity markets in the face of the hurricane has been impressive. "We think equity prices may work higher in response to less than expected damage to oil facilities or the prospect of a quicker end to rate hikes." The IPC currently forecasts that the S&P 500 Index will close the year at 1270, representing about a 5% gain for calendar 2005.

Investors will likely keep their eyes focused on the price of oil. Crude oil futures reached as high as $70.90 on threats that Katrina would halt production in the Gulf of Mexico. Oil prices later pulled back after Washington announced it would release supplies from the nation's Strategic Petroleum Reserve. Standard & Poor's and Global Insights project that oil prices will trade as high as $70 to $75 in the near term, but close the year near the prestorm target of around $62 and decline to $52 by yearend 2006.

FED WARNINGS. In addition, during August, investors weighed comments by Federal Reserve Chairman Alan Greenspan, who warned about the risks to the economy posed by the trade and budget deficits. He also warned that the housing boom represents an economic imbalance that could end badly for the economy. This came after sales of new U.S. homes soared by 6.5% in July to a record seasonally adjusted annual rate of 1.41 million.

The IPC is maintaining its yearend 2005 fed funds rate and 10-year note yield targets of 4.25% and 4.75%, respectively.

Below is a list of the best- and worst-performing domestic equity funds by style category for August.

August Doldrums for Stock Funds

Fund Investment Style

Average Returns August 2005 (%)

Average Returns YTD (%)

Large-Cap Growth

-0.99

1.85

Large-Cap Value

-0.59

2.97

Large-Cap Blend

-0.7

2.09

Mid-Cap Growth

-0.77

5.09

Mid-Cap Value

-0.7

6.41

Mid-Cap Blend

-0.65

6.09

Small-Cap Growth

-1.4

2.93

Small-Cap Value

-1.25

4.89

Small-Cap Blend

-1.25

4.01

All-Cap Growth

-0.48

3.14

All-Cap Value

-0.35

3.87

Domestic Equity Funds (excludes sector and balanced funds)

-0.87

3.31

S&P 500-Stock Index

-1.12

1.72

And here are the funds ranked the highest by BusinessWeek and their 5-year annualized pretax returns through August.

A-List Funds

Fund

Symbol

5-year Pretax Annualized Return (%)

ABN AMRO Real Estate N

ARFCX

19.3

AIM Energy Inv

FSTEX

15.3

AIM European Small Company A

ESMAX

17.5

AIM Gold & Precious Metals Inv

FGLDX

20.3

AIM Real Estate A

IARAX

21.6

AXP Precious Metals A

INPMX

18.0

Adelante US Real Estate Securities Y

LLUYX

19.7

Aegis Value

AVALX

18.6

Allegiant Small Cap Value I

AMRIX

15.0

AllianceBernstein Real Est Invstmnt Adv

ARSYX

19.5

AllianceBernstein Real Est Invstmnt Instl I

ARIIX

19.0

Allianz NFJ Small Cap Value A

PCVAX

19.1

Alpine International Real Estate Equity Y

EGLRX

20.2

Alpine Realty Income & Growth Y

AIGYX

21.2

Alpine US Real Estate Equity Y

EUEYX

30.8

Amer Beacon Small Cap Value PlanAhead

AVPAX

20.4

Amer Century Global Gold Inv

BGEIX

23.2

Amer Century Real Estate Inv

REACX

20.3

Amer Century Sm Cap Vl Inv

ASVIX

18.5

Amer Century Sm Company Inv

ASQIX

14.8

Ariel

ARGFX

14.9

Artisan Small Cap Value

ARTVX

17.4

Berwyn

BERWX

20.6

BlackRock Global Resources Inv A

SSGRX

32.1

Boston Company International Small Cap

SDISX

15.6

Boston Company Small Cap Value

STSVX

17.4

Brazos Real Estate Securities Y

BJRSX

18.1

Bridgeway Micro Cap Limited

BRMCX

16.5

Bridgeway Ultra Small Company

BRUSX

24.5

Bridgeway Ultra Small Company Market

BRSIX

20.4

Bruce

BRUFX

31.8

Buffalo Small Cap

BUFSX

14.5

Burnham Financial Serv A

BURKX

23.0

CGM Focus

CGMFX

33.6

CGM Realty

CGMRX

28.6

CRM Small Cap Value Instl

CRISX

14.5

Century Small Cap Select Instl

CSMCX

16.6

Cohen & Steers Realty Focus Instl

CSSPX

22.9

Cohen & Steers Realty Income C

CSCIX

17.9

Cohen & Steers Realty Shares

CSRSX

20.1

Cohen & Steers Realty Shares Instl

CSRIX

20.2

Columbia Real Estate Equity Z

CREEX

17.1

Columbia Small Cap Z

SMCEX

14.4

Commonwealth New Zealand

CNZLX

16.0

Consulting Grp Cap Mkts SmCp Vl Eq

TSVUX

15.2

Davis Real Estate A

RPFRX

18.8

Delafield

DEFIX

17.3

Delaware Emerging Markets A

DEMAX

17.2

Delaware Real Estate Inv Tr A

DPREX

18.3

Delaware Small Cap Value A

DEVLX

15.7

Diamond Hill Bank & Financial A

BANCX

22.1

Dreyfus Premier Sm Cap Val A

DSVAX

15.7

EII Realty Securities Instl

EIIRX

17.8

Eastern European Equity A

VEEEX

19.6

Evergreen Precious Metals A

EKWAX

27.4

Evergreen Small Cap Value I

ESKIX

14.4

Excelsior Engy & Natrl Resources

UMESX

14.5

Excelsior Real Estate

UMREX

19.0

FBR Small Cap

FBRVX

19.0

FBR Small Cap Financial

FBRSX

22.3

FMC Strategic Value

17.0

Fairholme

FAIRX

17.4

Fidelity Low Priced Stock

FLPSX

18.1

Fidelity Real Estate Investment

FRESX

19.9

Fidelity Select Chemicals

FSCHX

14.8

Fidelity Select Construction & Housing

FSHOX

21.2

Fidelity Select Gold

FSAGX

18.9

Fidelity Select Industrial Materials

FSDPX

15.7

Fidelity Select Medical Delivery

FSHCX

21.3

Fidelity Select Natural Gas

FSNGX

14.4

Fidelity Value

FDVLX

14.4

Fifth Third Micro Cap Value Instl

MXAIX

18.0

First American Real Estate Securities Y

FARCX

20.7

First Eagle Global A

SGENX

17.4

First Eagle Gold A

SGGDX

27.6

First Eagle Overseas A

SGOVX

17.6

Forward Emerald Select Banking & Finance A

HSSAX

21.3

Forward Uniplan Real Estate Investment

FFREX

16.9

Franklin Balance Sheet Invmt A

FRBSX

15.9

Franklin Gold & Precious Metals A

FKRCX

18.0

Franklin MicroCap Value

FRMCX

19.8

Franklin Real Estate Sec A

FREEX

18.4

GMO Emerging Markets Quality III

GMASX

15.3

Gabelli Gold AAA

GOLDX

25.3

Goldman Sachs Mid Cap Value A

GCMAX

16.5

Goldman Sachs Real Estate Sec A

GREAX

19.3

Harris Insight Small Cap Value N

HSVAX

14.4

Heartland Select Value

HRSVX

14.8

Heartland Value

HRTVX

16.7

Heartland Value Plus

HRVIX

14.9

Heitman REIT PBHG

PBRTX

19.4

Hilliard Lyons Senbanc

SENBX

17.7

HomeStead Small Company Stock

HSCSX

15.3

Hotchkis & Wiley Mid-Cap Value I

HWMIX

20.2

Hotchkis & Wiley Small Cap Value I

HWSIX

27.4

Hussman Strategic Growth

HSGFX

15.3

ICON Energy

ICENX

21.2

ING Precious Metals

LEXMX

20.7

ING Russia A

LETRX

29.8

Ivy Global Natural Res A

IGNAX

20.9

Ivy Real Estate Securities A

IRSAX

19.9

J Hancock Classic Value A

PZFVX

15.8

J Hancock Real Estate A

JREAX

17.9

JPMorgan Small Cap Value Sel

PSOPX

17.4

JPMorgan US Real Estate A

SUSIX

19.0

James Advantage Small Cap

JASCX

15.6

Janus Mid Cap Value Inv

JMCVX

14.9

Jennison Natural Resources A

PGNAX

21.9

Keeley Small Cap Value

KSCVX

17.4

Kensington Strategic Realty A

KSRAX

19.4

Kinetics Paradigm

WWNPX

17.6

Legg Mason Eq Tr US Small Cap Vl Prim

LMSVX

15.9

Lord Abbett Small Cap Value A

LRSCX

15.8

MainStay Small Cap Opportunity I

MOPIX

16.1

Managers Real Estate Securities

MRESX

17.9

Marshall Mid Cap Value Inv

MRVEX

14.7

Matthews Asian Growth & Income

MACSX

17.2

Matthews Korea

MAKOX

20.6

Merrill Lynch Natural Resources A

MDGRX

20.0

Midas

MIDSX

17.7

Morgan Stanley Instl Intl Real Estate A

MSUAX

23.0

Morgan Stanley Instl US Real Estate A

MSUSX

20.0

Morgan Stanley Real Estate B

REFBX

18.5

Morgan Stanley Special Value D

SVFDX

14.2

Munder Real Estate Eq Invmnt A

MURAX

18.6

Munder Small Cap Value A

MNVAX

18.5

Neuberger Berman Genesis Inv

NBGNX

16.4

OCM Gold

OCMGX

23.7

Oakmark Global I

OAKGX

18.2

Oakmark International Small Cap I

OAKEX

17.4

Oppenheimer Developing Markets A

ODMAX

15.8

Oppenheimer Gold & Special Minerals A

OPGSX

21.3

Pacific Advisors Small Cap A

PASMX

16.2

Pacific Capital Small Cap Y

PSCYX

20.9

Perritt Micro Cap Opportunities

PRCGX

17.6

Phoenix Equity Income A

REALX

17.0

Phoenix Mid Cap Value Fund A

FMIVX

15.5

Phoenix Real Estate Sec A

PHRAX

21.0

Pioneer Real Estate Shares A

PWREX

18.9

ProFunds Real Estate Ultrasector Inv

REPIX

20.2

Putnam Small Cap Value A

PSLAX

16.3

Quant Emerging Markets Ord

QFFOX

15.4

RS Global Natural Resources

RSNRX

25.8

RS Partners

RSPFX

25.2

RS Value

RSVAX

17.1

Robeco Boston Partners Sm Cap Val II Inv

BPSCX

20.6

Royce Pennsylvania Mutual Inv

PENNX

15.1

Royce Premier

RYPRX

14.1

Royce Special Equity

RYSEX

17.5

Royce Total Return Inv

RYTRX

14.2

Russell Real Estate Securities S

RRESX

19.6

STI Classic Small Cap Value Equity C

STCEX

16.8

Schneider Small Cap Value

SCMVX

24.4

Scudder Gold & Precious Metals S

SCGDX

26.0

Scudder Small Company Value S

SCSUX

15.4

Security Mid Cap Value A

SEVAX

16.2

Skyline Special Equities

SKSEX

14.8

Spirit of America Real Estate A

SOAAX

19.6

Strategic Partners Real Estate Securities A

PURAX

22.9

Strategic Partners Sm Cap Value A

PZVAX

19.7

Stratton Monthly Dividend REIT

STMDX

18.0

Stratton Small Cap Value

STSCX

18.0

T Rowe Price Emerging Europe & Mediterranean

TREMX

17.4

T Rowe Price Latin America

PRLAX

15.2

T Rowe Price Mid-Cap Value

TRMCX

15.4

T Rowe Price New Era

PRNEX

15.4

T Rowe Price Real Estate

TRREX

20.2

T Rowe Price Small Cap Value

PRSVX

17.5

TAMARACK Enterprise S

TETSX

16.0

TAMARACK Microcap Value S

TMVSX

15.1

Templeton China World A

TCWAX

15.7

Texas Capital Value & Growth

TCVGX

19.0

Third Avenue Real Estate Value

TAREX

20.4

Third Millennium Russia

TMRFX

25.0

Tocqueville Gold

TGLDX

26.0

US Global Accolade Eastern European

EUROX

32.0

US Global Inv Global Resources

PSPFX

30.2

US Global Inv Gold Shares

USERX

24.3

US Global Inv World Prec Minerals

UNWPX

26.9

USAA Precious Metals & Minerals

USAGX

27.5

Undiscovered Managers REIT Instl

URTLX

20.3

Van Eck Global Hard Assets A

GHAAX

17.2

Van Eck Intl Investors Gold A

INIVX

23.4

Van Kampen Real Estate Securities A

ACREX

19.0

Vanguard Energy Inv

VGENX

21.8

Vanguard Precious Metals

VGPMX

27.4

Vanguard REIT Index

VGSIX

19.3

Vanguard Selected Value

VASVX

14.1

Wasatch Micro Cap

WMICX

19.6

Wasatch Small Cap Value

WMCVX

16.8

Wells Fargo Advtg Small Cap Value Z

SSMVX

17.5

Wells S&P REIT Index A

WSPAX

18.9

Westwood Income AAA

WESRX

17.9

Wilshire Target Small Co Vl Inv

DTSVX

16.3

Yacktman

YACKX

16.8

Yacktman Focused

YAFFX

16.2

iShares DJ US Real Estate Index

IYR

18.3

iShares MSCI Australia Index

EWA

15.8

iShares MSCI Austria Index

EWO

29.4

iShares MSCI South Korea Index

EWY

14.3

iShares Russell 2000 Value Index

IWN

14.8

n/i numeric investors Small Cap Value

NISVX

23.7

Dance is an analyst for Standard & Poor's Fund Advisor


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