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Top Performing Mutual Funds – 10 years ending 2018

top performing mutual funds

One of the worst mistakes beginning investors often make is to try and choose top performing mutual funds based solely on past performance. While past performance can be a useful indicator of how a fund invests and what it invests in (high risk and return vs low risk and return), it is all too often the case that the best performer in past years falls to become one of the worst performers in future years. This extra lag from performance chasing, combined with the significantly higher cost and complex share classes of mutual funds are why I prefer ETFs to mutual funds. That said, I do occasionally find it useful to take a look at some of the very few top performing mutual funds in each of several categories that have managed to outperform over 10+ years to see if there are any factors that might be worth noting. Anything less than 10 years, as I would agree with Jack Bogle, is noise in stock markets. As seen below, the drivers of the long-term outperformance can often be credited to simple factors like value or momentum that can be replicated far more cheaply with factor ETFs.

So here are some selections of top performing mutual funds from the US equity, international equity, bond, and alternative categories. This time, I included links to Morningstar instead of Yahoo, as I did with the lists of the oldest mutual funds.

Top performing US equity mutual funds

The top performing mutual funds investing in US stocks mostly had one factor in common: large cap growth, especially with an overweight in technology. One clue of how hard it is for actively managed US stock mutual funds to beat their benchmarks is that out of thousands of funds, 3 of the top 8 10-year performers listed below are Nasdaq 100 index funds.

Name Symbol
Morgan Stanley Multi Cap Growth Trust CPODX
Morgan Stanley Institutional Fund, Inc. Growth Portfolio MSEQX
Fidelity OTC Portfolio FOCPX
Jackson Square Small and Mid Cap Growth Fund JSMTX
Shelton Capital Management Nasdaq-100 Index Fund NASDX
USAA NASDAQ-100 Index Fund USNQX
PIMCO RAE PLUS Fund PXTNX
Rydex NASDAQ-100 Fund RYOCX

Top performing international equity mutual funds

Another factor seen between 2008 and 2018 is that US stocks performed better than non-US stocks, so the best performing “international” funds were ones that tended to overweight the US, as well as overweighting large growth over the same period.

Name Symbol
Morgan Stanley Institutional Fund, Inc. Global Opportunity Portfolio MGGIX
Oppenheimer Global Opportunities Fund OPGIX
Seven Canyons World Innovators Fund WIGTX
Matthews India Fund MIDNX
Wasatch Global Opportunities Fund WIGOX
Artisan Global Opportunities Fund APDRX
Hennessy Japan Small Cap Fund HJSIX
Fidelity Pacific Basin Fund FPBFX
T. Rowe Price Global Stock Fund PRGSX

Top performing bond mutual funds

In the bond category, 4 of the 5 top performers are high yield bond funds, which is not surprising given the low prices / high spreads junk bonds had at the depths of the financial crisis 10 years ago.

Name Symbol
Salient Select Income Fund KIFYX
Fidelity Capital and Income Fund FAGIX
Federated High Yield Trust FHTIX
Guggenheim High Yield Fund SHYIX
Eaton Vance High Income Opportunities Fund EIHIX

Top performing “alternative” mutual funds

Last but not least, I wanted links to some top performing mutual funds in the “alternatives” category, many of which could make the cut simply by having 10+ year track records. The most common strategy in this category was long/short equity, probably due to the relative ease of getting a compliant retail mutual fund in this category compared with other alternative strategies.

Name Symbol
AMG FQ Long-Short Equity Fund MEQFX
Weitz Partners III Opportunity Fund WPOPX
Guggenheim Alpha Opportunity Fund SAOIX
BlackRock Event Driven Equity Fund BILPX
Dunham Appreciation and Income Fund DNAIX
DWS Global Macro Fund MGINX

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