The Top Funds Over Five Years: Gold, Emerging Markets & Diversification Lead

by Charles Rotblut, CFA

The Top Funds Over Five Years: Gold, Emerging Markets &
Diversification Lead Splash image

Gold and emerging market stock funds held onto their top spots in this year’s ranking of the top mutual funds over the past five years.

Bond funds were also very prevalent among the best-performing categories. Conversely, large-cap domestic funds remained among the worst-performing categories.

The numbers reflect both the importance of diversification and the frustration still felt by many investors. Those who maintained a heavy allocation to U.S.large-cap stock funds since the start of 2006 found themselves more reliant than they would have liked on dividends for a source of total return. Those who owned funds from a variety of categories are now feeling rewarded for withstanding both the downward and upward volatility of the past several years.

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Charles Rotblut, CFA is a vice president at AAII and editor of the AAII Journal. Follow him on Twitter at twitter.com/charlesrotblut.


Discussion

Anthony from Arizona posted over 3 years ago:

I always appreciate the depth of your analysis. Gold has, and I believe will continue to do well. Emerging Markets have done what, 18% a year for ten years. Slacked off now but where is the growth going to be in the future?
Bonds? We may have been in a bull market for bonds the last decade or so too, but I think you would have to agre to underweight them today, wouldn't you?


John from Florida posted over 3 years ago:

Diversification is of questionable help when all asst classes rise and fall together. The Fed must tighten eventually. This makes long duration bonds a risky olace to be. Work around the edges with REITs, Convertibles solid high dividend equities and low duration bonds. Also consider TIPs. Gold has seen its besr profits but will be a safe haven when inflation kicks in.


Frank from Connecticut posted over 3 years ago:

I wonder about mutual fund costs.

Vanguard has traditionally provided low cost funds, but I don't remember them performing that well.

If one only buys low cost funds does that mean an investor has succeeded by buying the low cost fund -- at the expense of performance?

How about a metric $returned/unit of expense?


Dave from North Carolina posted over 2 years ago:

THE COLLOSAL DEBT OF THE U.S. SPELLS AN ECONOMIC MELTDOWN. cONSIDER THAT FANNIE AND FREDDIE ARE
HANGING OUT THERE. BANKS DO NOT SHOW SECOND MORTGAGES IN DEFAULT. TRILLIONS OF UNFUNDED LIABILITIES IN CREDIT DEFAULT SWAPS AND PENSIONS


Kevin from California posted over 2 years ago:

On table 2, #12, where did you get information on Fairholme? 2011 was a -14.47 and their 5 year record is 3.27.

Unfortunately I own some.


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