In an indication that the relationship between risk and style is weak, this past quarter’s top-10 list was a homogeneous mix of growth, value, micro-cap, small-cap, real estate and health care funds. Joining Wasatch’s offering to round out the top five were Vanguard Health Care Fund, Caldwell and Orkin Market Opportunity Fund, Clipper Fund Inc. and the Meridian Value Fund, according to RiskMetrics Group’s “Best and Worst” Funds of the Third Quarter 2003 report.
Representing the rest of the top 10 performers were:
- T Rowe Price Capital Appreciation Fund Inc.
- Wasatch Core Growth Fund
- Oakmark Equity and Income Fund
- First American Real Estate Securities Fund
- Consulting Group Small Capitalization Value Equity Fund.
Overall, the best list included 79 different mutual funds across four different risk categories: conservative, balanced, growth and aggressive funds.
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 19 constituents across three different risk categories. Those of third-quarter dubious distinction included one balanced fund – Seligman Income Growth – and other funds in the growth and aggressive categories, including:
- AXP Mutual
- Chaconia Income & Growth
- SAFECO Dividend Income
- Principal Blue Chip
- Federated Capital Income
- Seligman Common Stock
- Pioneer Growth Shares
- Ivy International
- Fairport Growth & Income
- Delaware Group Devon.
Members of the list are identified by applying a performance measure containingseveral 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 third quarter can be found at http://www.riskmetrics.com/us_funds.html .
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