Mutual funds outperform stock market
Boston — Mutual funds seem to be one way to keep ahead -- if only barely -- of a declining stock market. Despite a broad stock market decline that has lasted more than a year, and accelerated in the last few months, mutual funds showed their best comparative performance records in some time, according to the Weisenberger Investment Companies Service.
In its latest monthly survey of mutual fund performance, Weisenberger found that while the average value of the portfolios of many funds was down sharply, their yields over the year ending Aug. 31 were unchanged or up slightly.
For the latest 6 months, 49.5 percent, or 245 of the 495 mutual funds covered by Weisenberger outperformed the New York Stock Exchange composite index, which recorded a 5.2 percent decline in the period. For the 12 months ending in August, 222 funds, or 44.8 percent of them, did better than the NYSE composite which had a bare gain of 0.9 percent in the period.
Keeping this kind of record wasn't easy, considering the drop in the net asset values of mutual fund portfolios. For instance, 85 maximum capital gain funds showed a change in net asset value of plus 6.8 percent for the six months ending July 31. But for the period ending Aug. 31., portfolio values for these same funds declined 2.3 percent. But their average 12-months yields increased 2 .1 percent, compared with a 1.9 percent increase at the end of July.
Another group of funds -- long-term growth -- showed a similar experience. The value of their portfolios went from a 3.8 percent increase for the 6 months ending in July to a 3.4 percent decrease for the half year ending in August. But the yields for these funds were up 3.1 percent, compared with a 2.8 percent increase for the year ending in July.
The top-performing fund, according to Weisenberger, was the Foster Hickman & Zaenglein Tax Managed Fund, which posted a gain of 20.6 percent for the six-month period. The next four were: Merrill Lynch Pacific Fund, up 18.1 percent; Lindner Fund, up 15.8 percent, Colonial Tax Managed Fund, up 11.1 percent; and the MagnaCap Fund, up 7 percent.
The nation's money market funds continued their winning ways, the Weisenberger survey found. At the end of August, these high-flyers counted $141 .2 billion in assets. The conventional funds posted average 30-day yields of 17 .2 percent, while the tax-exempt funds came in at 7.3 percent.