Meet the Fund That Has Topped the S&P 500 Each Year Since 1999

The end of a year is always accompanied by "best of" and "worst of" lists. In that spirit, especially at the closing of a decade bookended by wild market behavior, we thought it would be interesting to compile a list of domestic-equity funds that have topped the S&P 500 Index each calendar year since 1999. We excluded funds that weren't also on track to beat the index this year.

This exercise started, of course, with Bill Miller of  Legg Mason Capital Management Value (LMVTX). Just four years ago the fund beat the S&P 500 for an unprecedented 15 calendar years in a row. In the first part of the decade, every December buzzed with talk about if he would do it again. Miller's back ahead of the index this year with a nearly 41% return through Dec. 22. The streak is history, though, and few people even bring it up anymore. There are other funds, however, that have pretty good streaks going.

The list is small. In fact, it only contains one fund:  Manning & Napier Pro-Blend Max Term (EXHAX). It's one of Manning & Napier's four life-cycle funds, and it holds a mix of stocks, bonds, and cash. But with 93% of its assets in stocks, it's more fully invested that a lot of its large-blend category peers. As associate director of fund analysis Michael Breen noted in his recent analysis of the fund, "It has produced outsized gains in a variety of buoyant markets and has held up better than nearly all its rivals in bear markets." For example, when the S&P 500 lost 22% in 2002, this fund lost 18.3%, landing well within the category's top quartile. In 2008, the index tumbled 37%, while this fund lost 35.4%, another top-quartile performance.

The fund's adeptness has been on full display during 2009's market rally. As of Dec. 22, it's up 35.7%, easily topping the index's gain of 26.7%

If we use the same index-beating requirements but start our search in 2000, the list expands to include a group of mainly small- and mid-cap funds (the lone large cap on the list is American Independent Stock ). Leading the pack for the year to date is Wells Fargo Advantage Small Cap Opp (NVSOX), up 33.6%.

 

US Equity Funds beating the S&P 500 annually since 1999 (sample years), including YTD 2009

  Total Ret YTD Annual Ret 2008 Annual Ret 2005 Annual Ret 2002 Annual Ret 1999 S&P 500 TR 26.7 -37.0 4.9 -22.1 21.0 Manning&Nap Pro-Bl MaxTerm (EXHAX) 35.7 -35.4 7.5 -18.3 33.0

 

US Equity Funds beating the S&P 500 annually since 2000 (sample years), including YTD 2009

  Total Ret YTD Annual Ret 2008 Annual Ret 2005 Annual Ret 2002 Annual Ret 1999 S&P 500 TR 26.7 -37.0 4.9 -22.1 21.0 Manning&Nap Pro-Bl MaxTerm (EXHAX) 35.7 -35.4 7.5 -18.3 33.0 Wells Fargo Advantage Small Cap Opp (NVSOX) 33.6 -32.2 6.4 -18.9 13.8 Schroder US Opportunities (SCUIX) 32.1 -31.3 6.4 -18.9 13.1 American Indep Stock  31.1 -27.1 6.4 -17.6 -4.2 Lord Abbett Small-Cap Value (LRSCX) 30.3 -31.1 13.2 -11.1 8.2 Gabelli Small Cap Growth (GABSX) 29.2 -31.0 5.9 -5.3 14.2 CRM Mid Cap Value (CRIMX) 28.9 -35.0 8.0 -16.7 4.4

 

Return Date of 12/22/09.

Vanguard Adds Manager to Vanguard Capital Value and Launches a New Fund
Earlier this week, associate director of fund analysis Dan Culloton provided context on recent Vanguard news, including the addition of a new manager on the hot (up more than 80% for the year and now closed to new investors)  Vanguard Capital Value  and the upcoming launch of a new actively managed small-value fund, Vanguard Explorer Value.

TCW Names New Fund President
December has been a busy month at TCW Group, as Morningstar has reported (most recently here). This week, TCW named Chuck Baldiswieler president and CEO of the Strategic Income Fund and the TCW funds. He replaces Ron Redell, who joined ousted bond manager Jeffrey Gundlach's new firm, DoubleLine.

Oppenheimer Settles with Illinois
Illinois is the latest state to finalize a settlement with OppenheimerFunds to resolve an investigation into losses in the state's Bright Start 529 college savings plan, which Oppenheimer subsidiary OFI Private Investments still manages. Under the terms of the settlement, the fund family will pay Illinois $77.3 million, which will be distributed to eligible plan shareholders.

Illinois started its investigation in January 2009, on the heels of a 38% loss in 2008 for one of the plan's underlying funds, Core Plus Fixed Income (versus a gain of 5.2% for its benchmark).

This settlement doesn't recoup all of the plan's losses. The Chicago Tribune reports that plan investors lost $150 million in 2008.

Stowers Steps Down
James E. Stowers Jr., who founded American Century Investments in 1958, has stepped down from the firm's Kansas City-based fund board.

New Eagle Bond Fund
Eagle Asset Management will begin offering the Eagle Investment Grade Bond fund. Expenses for the fund's A shares will be capped at 0.85% through February 2011 (these shares also come with a load, or sales charge). The fund will be managed by James C. Camp, who joined Eagle in 1997 and has served as a portfolio manager and analyst on the fixed-income team.

Putnam and AllianceBernstein Announce New Fund Names
Following the announcement earlier this month that Darren Jaroch would take over  Putnam International Growth & Income (PNGAX) comes word that the fund's name will also change. It will be known as Putnam International Value. Putnam's International New Opportunities will also undergo a name change--it will be called Putnam International Growth. All changes are effective Jan. 1.

AllianceBernstein announced name changes for two of its funds. AllianceBernstein Wealth Preservation Strategy will be known as AllianceBernstein Conservative Wealth Strategy and AllianceBernstein Tax Managed Wealth Preservation Strategy will be known as the AllianceBernstein Tax Managed Conservative Wealth Strategy. Both changes are effective Dec. 31.

The Wisdom of ... Beehives and Snowflakes?
TEAM Financial Asset Management will launch the TEAM Asset Strategy Fund. It will be managed by James Dailey and Charles Brennaman. According to the press release, the managers will try to pinpoint when trends will change and affect prices by employing complex systems analysis, which the firm says is "typically used by quantum physicists and mathematicians to identify structure in seemingly random chaotic events, such as the unseen but known structures found in beehives or snowflakes."

Etc.
Lord Abbett is the latest to eliminate B shares, effective March 31, 2010.

As TCW's acquisition of MetWest continues to unfold, several manager changes have been unveiled. Adam Coppersmith replaced Allan Toole as portfolio manager of TCW Conservative Allocation  (TGPCX), TCW Moderate Allocation , and TCW Aggressive Allocation . Also, Penelope Foley, David Robbins, and Javier Segovia replaced Luz Padilla as portfolio managers of TCW Emerging Markets Income (TGEIX).

Acadian Asset Management is no longer the subadvisor for  Calvert World Values International Equity (CWVGX). Natalie Trunow of Calvert will now manage a portion of the fund, as will Bill Fries, Wendy Trevisani, and Lei Wang of Thornburg Investment Management and James Fairweather, David Sheasby, and Christine Montgomery of Martin Currie.

Dennis McCafferty joined the portfolio-management teams of  John Hancock High-Yield (JHHBX) and John Hancock Leveraged Companies .

Robert J. Bacarella is now a comanager of Monetta (MONTX), Monetta Young (MYIFX), and Monetta Mid-Cap Equity .

Robert McDorman, founding portfolio manager of  ICM Small Company (ICSCX), announced that he will retire on March 31, 2010.

Pending shareholder approval, First American Arizona Tax-Free  will merge into  First American Tax-Free .

AlphaStream Special Strategy will liquidate all assets by Jan. 21, 2010.

Paradigm Value (PVFAX) announced that it will not be making taxable distributions to shareholders in 2009.

Beginning Feb. 16, 2010, Class A shares of  Janus Short-Term Bond (JSHAX) will lower the front-load fee from 4.75% to 2.50%.

Mutual fund analyst David Falkof contributed to this report.