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Fund Spy

The 10 Biggest Winners and Losers of 2007

A look at the top and bottom of the mutual fund charts.

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We've crowned the managers of the year for 2007--and you may have noticed that they didn't have the top returns of the year. They did well but others did even better. That's because we value long-term performance, stewardship, and risk management much more than a blowout year. In fact those are all better ways to select funds for the future than going off single-year returns. You can ask someone who bought a hot Internet fund in January 2000 or a bear market fund in January 2003.

Yet there are lessons to be learned from looking at the best and worst performers of the year. You can see what worked the best that year and what areas are the riskiest. Making either the best or worst list implies a boatload of risk. So, let's have a look at the funds with the best and worst returns of 2007.

Direxion Commodity Bull 2x (DXCLX) +88%
As the name implies, this fund aims for twice the exposure to commodity prices by using heaping spoonfuls of leverage. With oil finishing the year near $100 and lots of other commodities soaring, this was the year to own it.

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Russel Kinnel does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.