Stock mutual funds rose in the third quarter, with managers investing in Latin America and energy-related companies posting the biggest gains.
The average domestic equity fund gained 5.3 percent in the quarter, compared with a 3.1 percent advance of the Standard & Poor’s 500 index, according to data compiled by Chicago-based Morningstar Inc. The average international stock fund jumped 13.4 percent.
Latin America funds surged 29.4 percent, followed by a 22 percent gain in energy funds, as Hurricanes Katrina and Rita pushed oil and natural gas prices to record highs. Precious metals funds rose 20.7 percent.
“There has been a big push in commodities,” said Neil Bathon, 43, president of Boston-based Financial Research Corp., a fund industry research firm. “Everyone is just flocking to natural resources.”
The top-performing funds in the quarter were the BlackRock Global Resources Fund, up 33 percent; and the Guinness Atkinson Global Energy Fund, up 31 percent. They were followed by the RS Global Natural Resources Fund and the Gartmore Global Natural Resources Fund, both up 29 percent.
Investors streamed into stocks such as Chevron Corp. and Valero Energy Corp. as crude oil prices rose to a high of $70.85 a barrel Aug. 30, the day after Hurricane Katrina made landfall.
Katrina and Rita shut refineries and platforms along the Gulf of Mexico and disrupted production, squeezing supply as demand from the U.S. and China strengthened.
Crude oil prices have risen more than 50 percent this year, contributing to a more than threefold gain since November 2001. Profits among oil refiners like Valero and Chevron have soared this year, boosting stock prices.
The worst-performing domestic stock fund was the Frontier Equity Portfolio, managed by Freedom Investors Corp. in Hartland, Wis., which lost 13 percent.
Latin America funds prospered amid rising currencies versus the U.S. dollar and economic expansion helped by improved balance sheets and rising export demand, said Bob von Rekowsky, manager of the Fidelity Emerging Markets Fund, which rose 19 percent in the quarter.
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Mutual fund performance
Preliminary total returns with dividends reinvested, ranked by third-quarter performance:
PERFORMANCE BY CATEGORY
%% BEST PERFORMING 3rd QUARTER 1-YEAR 3-YEAR ANNUALIZED
Latin America stock +29.43% +77.08% +56.46%
Specialty-natural resources +21.88 +48.39 +37.78
Specialty-precious metals +20.65 +13.78 +23.41
Japan stock +18.20 +26.39 +18.04
Diversified emerging mkt. +17.33 +44.04 +36.80
Diversified Pacific/Asia +14.73 +29.60 +23.03
Foreign small/mid growth +13.52 +35.66 +32.02
Foreign large growth +11.25 +24.73 +21.46
Foreign large blend +11.08 +25.14 +22.02
Foreign large value +10.03 +24.72 +25.30
WORST PERFORMING 3rd QUARTER 1-YEAR 3-YEAR ANNUALIZED
Bear market -3.47% -13.80% -20.90%
Long government -1.25 +5.45 +5.11
Long-term bond -0.91 +4.04 +7.27
Intermediate-term bond -0.58 +2.43 +4.02
Intermediate government -0.53 +2.27 +2.46
Muni Ohio -0.40 +2.51 +2.93
Muni Massachusetts -0.37 +2.84 +3.13
Muni single state interm. -0.34 +2.27 +2.83
Muni national interm. -0.30 +2.02 +2.74
Muni New York int./sh. -0.29 +2.13 +2.73
PERFORMANCE BY ASSET TYPE
TYPE 3rd QUARTER 1-YEAR 3-YEAR ANNUALIZED
International equities +11.30% +26.91% +24.76%
All equity +5.70 +17.36 +18.98
U.S. diversified +4.68 +15.85 +18.19
Domestic equities +4.61 +15.44 +17.73
Taxable bond +0.04 +3.43 +5.97
Source: Morningstar
Chicago Tribune
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Editor’s note: Today’s report on 3rd-quarter mutual fund and stock performance takes the place of the Monday Business section.
