The Wall Street Journal praised
the Rydex Dynamic Nasdaq-100 2x Strategy
and ProFunds UltraNasdaq-100
funds -- both leveraged index funds -- that posted gains of almost 120 percent as the newest members of its 'Winners Circle' for 2009 in Wednesday's 'Investing in Funds' special report.
Also garnering praise for their 80-plus percent returns in '09 were the Aegis Value Fund
led by Scott Barbee
, R. Canon Coleman II
's AIM Mid Cap Basic Value Fund
, and the Legg Mason Capital Management Opportunity Trust
managed by Bill Miller
Looking ahead to 2010, the WSJ takes an upbeat, albeit moderated tone. Casting the dye as to areas of growth, Jeff Opdyke predicts
that international-stock funds will continue to perform well but strong returns may be less tied to diversified emerging-markets funds –- which gained 76 percent in '09 -– and more receptive to developed markets.
Further bolstering the focus on international markets is the forecast that the U.S. dollar will continue its descent in 2010. For sure, funds such as the T. Rowe Price International Stock Fund
plan to keep their stakes in the emerging markets hotbed, but managers at Franklin Resources
funds and AIM International Growth
feel that Europe and companies in other developed markets hold considerable appeal. In particular, Australia seems to be drawing attention, with Encompass Fund
's Marshall Berol
concluding, “You'd be wise to look at mutual funds or exchange-traded funds that are focused on Australia.”
As for sectors to pay close attention to in 2010, look for energy and utilities to be on the minds of many investors. According to
Rob Curran, oil and gas-based funds, which had a stellar year in '09 soaring an average of 44 percent, did not fair equally as funds that were more focused on integrated oil companies trailed funds more tilted to independent drillers such as XTO Energy Inc., which was recently acquired by Exxon. Furthermore, oil and natural gas are now telling different stories as energy prices are rising and the economy still struggles to find its footing.
of Guinness Atkinson Global Energy
is eyeing North American-based gas-oriented companies over some of the foreign-based energy markets that rocked in '09, while Ryan Detrick
, senior technical strategist at Cincinnati-based Schaeffer's Investment Research
, tells Curran, “we like the oil-service area versus the integrated-oil names,” holding these stocks in ETF portfolios.
Also highlighted was the Vanguard Energy Fund
, while the U.S. Oil Fund
and Icon Fund
were deemed more disappointing.
Energy isn't the only sector under scrutiny as Dale Buss examines
the appeal of a mutual fund niche appealing to income-minded investors. Utility funds, which are more likely to bid a hasty adieu to '09 as they were the worst-performing U.S. stock category, are expected to see a reversal of fortune and pay out high dividend yields in the long-term, according to Buss. Although utility stocks' recovery is not expected to arrive immediately, managers like Bill Gross
, founder and co-chief investment officer of Allianz
, are more favorable to utility stocks of late.
While in the energy sector U.S.-based companies are attracting more attention, it's a more mixed story for utilities. MFS Utilities
and Jennison Utility
both have sizeable Brazilian utilities holdings, while Gabelli Utilities
remains upbeat on domestic utilities. Also named in the article is John Kohli
, manager of Franklin Utilities
, who is searching for opportunities in largely regulated companies and traditional utilities which often weather downturns quite well.
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