American Funds, Fairholme and Fido Surprise M*
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Monday, December 31, 2012

American Funds, Fairholme and Fido Surprise M*

Which funds offered the most surprises in 2012?

Morningstar examines a number of funds that had tumultuous experiences in 2012.

For example, the Fairholme Capital's Fairholme and the Schneider Small Cap Value funds had a great year, after "appalling" loses in 2011. Because these are focused funds, a few stocks can play a big role in their returns, according to Morningstar.

Momentum funds had a tough year, according to the research firm. Turner Midcap Growth lost 8.4 percent in 2011 but gained only 3.8 percent in 2012. Brandywine Blue lost 10.3 percent in 2011 and gained a mere 5.1 percent in 2012, giving it three bottom-decile performances in the past four years, according to Morningstar. One exception though was AQR Momentum, which produced a 15.2 percent gain this year.

Unpopular funds also had good years. For instance, Morningstar cites American Funds' Growth Fund of America, which was hit with $33 billion in outflows in 2012, even while returning 18.6 percent.  Also, American Funds Capital World G/I A shed $9 billion to outflows in 2011 but gained 17.9 percent this year.

Other funds examined include Fidelity's Fidelity Diversified International, Third Avenue's Third Avenue Value, Putnam [profile] Putnam Equity Income, Primecap's Primecap Odyssey Aggressive Growth and Vanguard's Vanguard Primecap Core.

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