Mutual Fund Monthly

The markets had a strong Q3 overall, despite the severe correction in mid-July-August. The theme of growth over value was prominent, and the disparity among the investment styles grew.

To wit, here are how the various Morningstar categories are faring YTD:

• Large-cap growth: +13.8% vs. Large-cap value: +6.9%
• Mid-cap growth: +19.8% vs. Mid-cap value: +1.5%
• Small-cap growth: +13.4% vs. Small-cap value: -3.2%

I also like to take a look at how all the mutual funds are faring in the universe that we follow here. Here is my top and bottom five (returns are YTD as of 9/30):

Top 5

CGMFX: +60.6%
IGNAX: +34.9%
DRIDX: +30.0%
JAOSX: +27.6%
TGVAX: +27.5%

Bottom 5

SWHIX: +3.1%
HFCGX: +3.2%
STSCX: +4.8%
SLASX: +6.7%
SSHFX: +7.1%

And I should give a shout to our best performing bond fund (PLMDX), which was up +9.6% ytd, and beating a handful of equity funds.

The big surprise is how many funds are beating their benchmarks. Our accounts have been overweighting growth funds, and also International, which has helped. I suppose if you are still in those funds that had outperformed over the last several years, you could be experiencing some frustration.

But I still don't think it is too late to make this shift. I think the relative outperformance of growth over value is still in its early stages, and should persist for some time.

Beverly Investment Advisors has positions in all funds mentioned