Overall, the best list included 99 different mutual funds across four different risk categories: conservative, balanced, growth and aggressive funds. After aggressive funds, which made up 53 of the total, growth funds composed 35 of the total, balanced funds nine and conservative funds two.
Among the list were some quarterly contenders for best honors, Wasatch Micro Cap, Meridian Value Fund, TRowe Price Capital Appreciation Fund and First American Real Estate Securities Fund. For the second quarter in a row though, the homogenous mix of growth, value, micro-cap, small-cap, real estate and health care funds once again showed the relationship between risk and style is weak.
“ Mutual fund investors, now more than ever, should be concerned about one factor above all else: are they seeing returns commensurate with the risks they are comfortable taking,” said RiskMetrics Group CEO Ethan Berman.
On the other side were those funds rated to be the quarter’s worst performers. While no specific rankings were handed out, RiskMetrics’ list included 10 constituents across three different risk categories. Those of fourth quarter dubious distinction included one balanced and growth fund – Rydex Juno and John Hancock International, respectively – and the remaining funds in the aggressive category, including:
- AAL International
- Delaware Devon
- Fairport Growth & Income
- Ivy International
- MFS Union Standard
- Morgan Stanley Japan
- Pioneer Growth
- Seligman International Growth
Members of the list are identified by applying a performance measure containing several components:
- risk of the fund based on its RiskMetrics Group’s volatility measure
- excess return achieved by the fund, relative to a benchmark with the same degree of risk as the fund
- variability of the fund’s risk level over time.
A complete list of the best and the worst mutual funds for the fourth quarter can be found at http://www.riskmetrics.com/us_funds.html .