To look at stock-fund returns in 2009 divorced from 2008 performance would be to read only half the real story suggests
the Wall Street Journal's Sam Mamudi in Friday's Fund Track column.
Despite average stock-fund returns of 34.9 percent in 2009, only 3 percent of equity funds with over $100 million in assets (that were in existence the past two years) have posted gains, according to data culled from Morningstar. Factor in inflation and that figure drops to under 2 percent with funds holding fewer assets performing the best.
“Maybe fund companies are excited about 2009's returns, but investors are aware of how much money they've put into their accounts,” stated Karen Dolan, Morningstar's director of mutual-fund analysis. “Performance in 2009 was good, but I don't think it was good enough to convince investors” to return to stocks she told the Wall Street Journal.
The Putnam Voyager Fund (PVOYX), which holds approximately $3.7 billion in assets, is the most notable 'big fund' exception. The Voyager fund finished 2008 down 37 percent but rallied sharply in '09 to finish up 64 percent. It seems many people in the investment community credit fund manager Nicholas Thakore for the fund's impressive rebound as he took the helm at the fund on November 30 2008. As previously reported by the MFWire, the Boston Globe crowned
Thakore the recipient of its annual 'Boston Capital Fund Manager of the Year,' while the Journal's Daisy Maxey sung
his praises in the Fund Track column back in November for having turned around the fund's fortunes.
Other funds earning kudos include the Appleseed Fund (APPLX), which has over $100 million assets and a two-year annualized return of 14.5 percent, the Intrepid Small Cap (ICMAX), Yacktman Focused (YAFFX), USAA Precious Metals and Minerals (USAGX), Burnham Financial Industries (BURFX) and Tocqueville Gold (TGLDX).
Funds still in the red after being pummeled in '08 include the Oppenheimer International Small Companies (OSMAX) which plummeted 66 percent in '08 and the Van Kampen Equity Growth Fund (VEGAX) which fell 50.7 percent in '08.
So despite average equity-fund returns reaching highs not seen since 1958 and the rally in stocks that has been underway since March, investors are still testing the waters when it comes to stock funds and finding them still lukewarm.
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