Funds: A Fast Finish in October

A sharp drop in oil prices at month's end helped push most funds into the black, after weeks of election jitters

By Amey Stone

The run-up to the election wasn't kind to mutual-fund investors, with a nervous October creating lots of swings in the stock market. For most of the month stocks traded down as oil prices spiked, companies posted third-quarter earnings growth that was less than stellar, and the race for the Presidency remained disarmingly close.

If it weren't for a sharp drop in oil prices during October's last days, market averages would have been in the red for the month. But thanks to the oil-related boost, U.S. diversified equity funds posted a 1.6% gain for October, a bit better than the S&P 500-stock index, which climbed 1.5%, according to data from Standard & Poor's. (For complete results for more than 5,000 funds, see BW Online's Interactive Mutual Fund Scoreboard.)

Of equity diversified funds, the best investment strategy was mid-cap growth, in which investors look for midsize companies that have strong earnings. That group of funds climbed 2.7%. Small-cap growth funds did almost as well, gaining 2.3%. Value funds, where managers buy stocks of companies that are cheap, fared poorly in comparison to growth funds. It didn't matter what size companies value investors focused on: Small-cap value funds rose just 1%, large-cap value funds gained 1.2%, and mid-cap value funds picked up 1.3%.


  Of the sector funds, technology fared by far the best in October, climbing 5.6% on average, thanks to strong earnings for companies like Apple (AAPL ), eBay (eBay ), Texas Instruments (TXN ), and Sun Microsystems (SUNW ). Communications funds also performed well, rising 5.2%. ProFunds scored big with its Internet Ultrasector (INPIX ), up 13.9, and Semiconductor Ultrasector (SMPIX ), up 12%. An exchange-traded fund, iShares Goldman Sachs Software Index (IGV ), came in next with a 10.2% gain, followed by Jacob Internet (JAMFX ), up 10.1%.

The worst-performing sector was health care, which fell 1.7% in October on worries that John Kerry would win the election and promote policies that would hamper the industry's profitability. The only other sector in the red for October was natural resources, which fell 0.1%. That sector, up 40% in the prior 12 months, slipped as commodities prices fell in late October.

On the fixed-income side, taxable bond funds gained 0.9%, while municipal bond funds rose 0.7%. International bond funds were the standouts, climbing an average of 2.3% in October. Morgan Stanley International Fixed Income Institutional (MPIFX ) was the top-performer, up 3.9%. Evergreen International Bond (ESIYX ) was second best, returning 3.8%.


  Emerging-markets bond funds did almost as well, up 1.8% on average. Extra-safe "ultrashort" bond funds ranked last among fixed-income categories but still did the job, gaining 0.2% in October.

October was a scary month for fund investors, in which sharp market swings heightened anxiety. But in the end, both stock and bond investors fared well.

  The A-List Funds
Fund Ticker 5-Year Annualized Pretax Return (%)
ABN AMRO Real Estate N ARFCX 19.7
AIM Energy Inv FSTEX 16.2
AIM Gold & Precious Metals Inv FGLDX 16.9
AIM Real Estate A IARAX 22.3
AXP Precious Metals A INPMX 17.2
Aegis Value AVALX 19.4
Al Frank VALUX 18.4
AllianceBernstein Real Est Invstmnt Adv ARSYX 20.1
AllianceBernstein Real Est Invstmnt Instl I ARIIX 19.1
Alpine Realty Income & Growth Y AIGYX 22.7
Alpine US Real Estate Equity Y EUEYX 27.9
Amer AAdvantage Small Cap Value Instl AVFIX 20.0
Amer Century Glbl Gold Inv BGEIX 18.2
Amer Century Real Estate Inv REACX 20.5
Amer Century Sm Cap Vl Inv ASVIX 20.1
Amer Century Sm Company Inv ASQIX 16.1
Ariel ARGFX 16.5
Armada Small Cap Value I AMRIX 17.3
Artisan Small Cap Value ARTVX 16.7
Berwyn BERWX 16.9
Bjurman Barry Micro Cap Growth BMCFX 22.4
Bogle Small Cap Growth Inv BOGLX 17.0
Boston Partners Small Cap Value II Invest BPSCX 23.9
Brazos Real Estate Securities Y BJRSX 18.5
Bridgeway Micro Cap Limited BRMCX 17.5
Bridgeway Ultra Small Company BRUSX 31.0
Bridgeway Ultra Small Company Market BRSIX 24.8
Bruce   31.2
Buffalo Small Cap BUFSX 22.9
Burnham Financial Serv A BURKX 27.0
CGM Focus CGMFX 31.6
CGM Realty CGMRX 25.4
CRM Small Cap Value Instl CRISX 17.8
Cohen & Steers Realty Focus Instl CSSPX 22.6
Cohen & Steers Realty Income C CSCIX 18.6
Cohen & Steers Realty Shares CSRSX 20.6
Columbia Real Estate Equity Z CREEX 18.0
Columbia Small Cap Z SMCEX 15.8
Constellation Clover Small Cap Value I TCSVX 15.0
Davis Real Estate A RPFRX 19.1
Delafield DEFIX 17.7
Delaware RE Inv Tr A DPREX 19.7
Diamond Hill Bank & Financial A BANCX 18.2
EII Realty Securities Instl EIIRX 18.6
Emerald Select Banking & Finance A HSSAX 19.9
Evergreen Precious Metals A EKWAX 24.4
Excelsior Real Estate UMREX 19.0
F Russell Real Estate Securities S RRESX 20.6
FBR Small Cap FBRVX 19.1
FBR Small Cap Financial FBRSX 23.0
FMC Strategic Value   18.6
FMI Common Stock FMIMX 14.7
FMI Sasco Contrarian Value FMIVX 16.5
Fidelity Canada FICDX 16.3
Fidelity Low Priced Stock FLPSX 18.3
Fidelity Real Estate Investment FRESX 21.0
Fidelity Select Gold FSAGX 15.2
Fidelity Select Medical Delivery FSHCX 18.6
Fidelity Select Medical Systems & Equipment FSMEX 18.0
Fifth Third Micro Cap Value Instl MXAIX 18.8
First American Real Estate Securities Y FARCX 21.3
First American Small Cap Growth Opport Y FIMPX 15.0
First Eagle Global A SGENX 16.3
First Eagle Gold A SGGDX 24.3
First Eagle Overseas A SGOVX 16.1
Forward Uniplan Real Estate Investment FFREX 17.9
Franklin Gold & Precious Metals A FKRCX 16.5
Franklin Microcap Value FRMCX 19.2
Franklin Real Estate Sec A FREEX 19.4
Fremont Real Estate FREFX 16.7
Gabelli Gold AAA GOLDX 22.4
Gabelli Westwood Realty AAA WESRX 19.3
Goldman Sachs Mid Cap Value A GCMAX 16.1
Goldman Sachs Real Estate Sec A GREAX 20.2
Goldman Sachs Small Cap Value A GSSMX 19.2
Harris Insight Small Cap Value N HSVAX 17.5
Heartland Value HRTVX 19.3
Heartland Value Plus HRVIX 16.7
Heitman REIT PBHG PBRTX 19.2
Hennessy Cornerstone Growth HFCGX 15.3
Hotchkis & Wiley Mid-Cap Value I HWMIX 22.5
Hotchkis & Wiley Small Cap Value I HWSIX 26.7
iShares MSCI Austria Index EWO 18.2
ICON Energy ICENX 25.3
ICON Healthcare ICHCX 15.5
ING Precious Metals LEXMX 16.4
ING Russia A LETRX 45.2
Ivy European Opportunities A IEOAX 16.9
Ivy Global Natural Res A IGNAX 18.5
Ivy Real Estate Securities A IRSAX 20.0
J Hancock Classic Value A PZFVX 16.4
James Advantage Small Cap JASCX 15.1
Janus Mid Cap Value Inv JMCVX 17.8
Janus Small Cap Value Inv JSCVX 14.9
Jennison Health Sciences B PHLBX 15.1
Jennison Natural Resources A PGNAX 19.8
Kensington Strategic Realty A KSRAX 23.1
Lord Abbett Mid Cap Value A LAVLX 16.2
Lord Abbett Small Cap Value A LRSCX 17.8
MainStay Small Cap Value B MSPBX 15.3
Matthews Asian Growth & Income MACSX 17.6
Matthews China MCHFX 15.0
Meridian Growth MERDX 15.1
Meridian Value MVALX 16.0
Merrill Lynch Natural Resources A MDGRX 16.6
Morgan Stanley Instl European Real Estate A MSUAX 17.8
Morgan Stanley Instl US Real Estate A MSUSX 19.7
Morgan Stanley Real Estate B REFBX 18.4
Munder Real Estate Eq Invmnt B MURBX 18.0
Munder Small Cap Value Y MCVYX 18.9
Neuberger Berman Genesis Inv NBGNX 18.1
n/i numeric investors Small Cap Value NISVX 23.9
OCM Gold OCMGX 20.6
Oakmark Global OAKGX 18.2
Oberweis Micro Cap OBMCX 15.2
One Group Small Cap Value I PSOPX 17.5
Oppenheimer Developing Markets A ODMAX 16.5
Oppenheimer Gold & Special Minerals A OPGSX 17.5
Oppenheimer Real Asset A QRAAX 18.6
PIMCO NFJ Small Cap Value A PCVAX 16.2
PIMCO PEA Renaissance A PQNAX 17.0
Pacific Advisors Small Cap A PASMX 16.5
Pacific Capital Small Cap Y PSCYX 21.0
Perkins Discovery PDFDX 15.6
Perritt Micro Cap Opportunities PRCGX 23.6
Phoenix-Duff & Phelps Real Estate Sec A PHRAX 22.8
Phoenix-Seneca Equity Income A REALX 18.1
Pioneer Real Estate Shares A PWREX 19.1
Principal Real Estate Securities A PRRAX 20.3
Putnam Small Cap Value A PSLAX 17.0
RS Contrarian Value RSCOX 15.3
RS Global Natural Resources RSNRX 20.1
RS Partners RSPFX 26.0
Royce Low Priced Stock RYLPX 19.5
Royce Micro-Cap Inv RYOTX 18.1
Royce Opportunity Inv RYPNX 19.3
Royce Pennsylvania Mutual Inv PENNX 16.2
Royce Premier RYPRX 15.6
Royce Select RYSFX 17.0
Royce Special Equity RYSEX 18.3
SAFECO Small Cap Value Inv SFSCX 15.8
STI Classic Small Cap Value Equity L STCEX 17.1
Saratoga Small Capitalization I SSCPX 14.7
Schroder Capital US Opportunities Inv SCUIX 15.9
Scudder Gold & Precious Metals S SCGDX 26.2
Security Capital US Real Estate SUSIX 19.8
Security Mid Cap Value A SEVAX 18.0
Sentinel Small Company A SAGWX 16.2
Smith Barney Small Cap Value A SBVAX 16.8
Spirit of America Real Estate A SOAAX 19.0
State Street Research Aurora A SSRAX 17.9
State Street Research Global Resources A SSGRX 31.1
Strategic Partners Real Estate Securities B PURBX 21.7
Stratton Monthly Dividend REIT STMDX 18.4
Stratton Small Cap Value STSCX 15.7
Strong Advisor Small Cap Value Z SSMVX 20.8
Strong Mid Cap Disciplined SMCDX 17.4
T Rowe Price Mid-Cap Value TRMCX 15.2
T Rowe Price Real Estate TRREX 21.1
T Rowe Price Small Cap Value PRSVX 18.5
TAMARACK Enterprise S TETSX 18.6
TAMARACK Microcap Value S TMVSX 16.2
TCW Galileo Opportunity N TGONX 15.5
TCW Galileo Value Opportunities I TGVOX 17.9
Texas Capital Value & Growth TCVGX 16.4
Third Avenue Real Estate Value TAREX 21.7
Third Avenue Small Cap Value TASCX 15.6
Third Millennium Russia TMRFX 37.8
Tocqueville Gold TGLDX 23.5
Turner Micro Cap Growth TMCGX 22.3
US Global Accolade Eastern European EUROX 28.2
US Global Inv Global Resources PSPFX 22.4
US Global Inv Gold Shares USERX 16.0
US Global Inv World Prec Minerals UNWPX 16.5
USAA Precious Metals & Minerals USAGX 23.4
Undiscovered Managers Behavioral Vl Instl UBVLX 15.8
Undiscovered Managers REIT Instl URTLX 21.4
Van Eck Intl Investors Gold A INIVX 18.6
Van Kampen Real Estate Securities A ACREX 18.7
Vanguard Energy VGENX 18.0
Vanguard Precious Metals VGPMX 20.2
Vanguard REIT Index VGSIX 19.4
Victory Real Estate A VREIX 17.5
Vontobel Eastern European Equity VEEEX 18.9
Wasatch Core Growth WGROX 17.5
Wasatch Micro Cap WMICX 26.3
Wasatch Small Cap Value WMCVX 23.1
Wells Fargo Small Cap Opportunities I NVSOX 16.2
Wells S&P REIT Index A WSPAX 18.9
Yacktman YACKX 16.1

Stone is a senior writer for BusinessWeek Online in New York

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