• / Free eNewsletters & Magazine
  • / My Account
Home>Research & Insights>Fund Times>Funds on the Upswing in 2009

Related Content

  1. Videos
  2. Articles

Funds on the Upswing in 2009

Plus, Putnam considers hedge funds, and more.

Morningstar Analysts, 06/29/2009

Morningstar's fund analysts cover 2,000 mutual funds. Their full analyst reports, including Stewardship Grades, are available in Morningstar Principia Mutual Funds Advanced and Morningstar Advisor Workstation Office Edition.

Thankfully, the first half of 2009 has been a lot less gut-wrenching for fund investors than the end of 2008.

Many funds started bouncing back after the market hit its recent low on March 9, and all diversified domestic-stock categories, with the exception of large-blend, have posted gains in the year to date through June 24.

With the midyear mark fast approaching, it's worth taking a look at diversified funds that have rebounded significantly in 2009. Many of this year's leaders were laggards during 2008's market meltdown, losing significantly more money than their peers. In fact, eight of the 10 top-performing diversified domestic-stock funds in 2009 were in the bottom decile of their respective categories in 2008.

Tellingly, the standard deviation of returns for all of these funds are above their respective category averages, suggesting that performance swings aren't all that unusual for this bunch.

One fund that stands out is Royce Select II Investment RSFDX, run by Chuck Royce and James Harvey.

The fund lost less money than 70% of its small-blend peers in 2008 and is leading the category so far this year, up 30%. It's worth noting that this fund has a $50,000 minimum and is only for qualified investors, and it's also run a bit differently than other Royce funds in that it can short stocks.

Of course, the fact that these funds are doing well now is by no means reason to run out and buy them.

©2017 Morningstar Advisor. All right reserved.