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The Top- and Bottom-Performing U.S. Equity Funds From the First Half

I look at the highlights and lowlights in equityland.

Russel Kinnel, 07/07/2015

Obligatory caveat: This isn't a buy list. That's what our Morningstar Medalists list is for. We have hundreds of medalists, and you can winnow the list based on your own criteria.

Top Five Performers
T. Rowe Price Health Sciences PRHSX
Total Return: 20%
Category Rank: Top 13%

Yes, it sounds like a broken record, but health care did well, and smaller biotech and pharma names did even better. Mergers keep driving the market higher, and this fund's emphasis on the small/mid-cap end of health care has been a boon. This fund's long rally has assets up to $15.5 billion, and the fund recently closed to new investors.

Century Small Cap Select CSMVX 
Total Return: 14%
Category Rank: Top 3%

This fund really needed the rebound. It lagged peers badly in 2013 and 2014. The fund has dialed up health-care exposure, and names such as AMN Healthcare Services AHS have helped, as have some tech and bank stocks. Even with the rally, the fund's three-year record is subpar.

Vanguard Health Care VGHCX 
Total Return: 14%
Category Rank: Top 61%

Mega-cap health-care stocks haven't been too shabby, either. Even dull names like UnitedHealth Group and Cigna are enjoying big rallies this year. The Supreme Court's ruling upholding the Affordable Care Act didn't hurt.

Fidelity Select Health Care FSPHX 
Total Return: 13%
Category Rank: Top 68%

See my comments above. For this fund, Boston Scientific BSX and Valeant Pharmaceuticals International VRX have been big contributors.

Scotia Dynamic U.S. Growth DWUGX 
Total Return: 13%
Category Rank: Top 1%

This superaggressive fund focuses on companies with the highest earnings-growth rates. As you can see, it's pretty when that clicks, but taking on a lot of price risk means it has a severe downside. Among the top performers in the portfolio are Tableau SoftwareDATA and Palo Alto Networks PANW--they were holdings at the end of the first quarter, at least. This fund has a 277% turnover ratio, so there's no telling if they are still in the fund.

Top Relative Performers
Scotia Dynamic U.S. Growth is also top 1%. Here are some more.

Dreyfus Opportunistic Small Cap DSCVX 
Total Return: 10%
Category Rank: Top 1%

David Daglio's bold fund is usually at the top or bottom of fund rankings. This year it is up 10% and in the top 1% of its peer group. He concentrates the portfolio on four sectors: technology, industrials, consumer cyclicals, and financials. His strategy is an unusual blend of value and growth names, and this year he's hitting on a lot of winners from both sides such as SVB Financial SIVB and Infoblox BLOX.

Russel Kinnel is Morningstar's director of mutual fund research. He is also the editor of Morningstar FundInvestor, a monthly newsletter dedicated to helping investors pick great mutual funds, build winning portfolios, and monitor their funds for greater gains. (Click here for a free issue). Mr. Kinnel would like to hear from readers, but no financial-planning questions, please. Follow Russel on Twitter: @russkinnel.

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