May's Top-Rated Stock Mutual Funds

Tag : silver bullion

The best rated open-end stock mutual funds in May each found theirown method for bucking the downward trend of the overall stockmarket. Below are the top 10 funds that beat all other stock fundswe rate without completely abandoning the stock market. The best rated open-end stock mutual fund this month is the Permanent Portfolio PRPFX rated A+ combining good returns with low volatility. This fund hasaccumulated nearly $2.9 billion in assets by sticking with itsstated strategy for the last quarter century. The Permanent Portfolio attempts to preserve and increaseshareholders' long-term purchasing power by diversifying among sixcategories: gold bullion, silver bullion, Swiss franc denominatedsecurities, inflation sensitive real estate & natural resourcestocks, aggressive growth stocks, and U.S. government securities.In the year ending May 31, gold rose 34.22% while silver polishedup returns of 25.64%. Over the same period, Swiss franc investments appreciated 17.57%against the U.S. dollar before including the interest paid by theSwiss bonds. The best stock holdings include Mosaic MOS , Peabody Energy BTU , Forest Oil FST , Fluor FLR and Devon Energy DVN . The second highest ranked fund is the TFS Market Neutral Fund TFSMX , also rated A+. The fund is designed to have a low correlation tothe U.S. stock market while being less volatile as well. To achievethis goal, a mixture of long and short equity positions, options &futures contracts, and other equity derivatives are utilized. Mission accomplished! The TFS Market Neutral Fund is uncorrelatedto the S&P 500 with an average correlation of just 0.19 frominception through June 30. Correlation comparison readings vary from 1, for securities thatmove exactly the way, to 0 for no correlation, to negative 1, forpairs that move in opposite directions. The fund's low beta of 0.10and standard deviation of 7.50% show success in reducing systemicrisk and volatility. With our risk-adjusted return rankings,combining good returns with lower risk is the ticket to highratings. With the U.S. economy struggling, this fund has a negative netexposure to consumer cyclical and consumer non-cyclical sectorshaving shorted more stocks in those sectors than were purchased aslong positions. The top five short positions are Third Wave Technologies TTWI , Chattem CHTT , Metalico MEA , Knight Transportation KNX , and Auxilium Pharmaceuticals AUXL . The fund would need Third Wave's friendly acquisition by Hologic HOLX to fail in order for the shares to fall from their current level.On the other hand, Chattem's Icy Hot Heat Therapy skin patchesburning some customers and not responding in a timely manner toFood and Drug Administration warnings could trigger licensesuspension, product seizures, or liability claims. Lastly,additional negative study results, such as Auxilium's recentlydisappointing hand treatment experiment, could hurt the shares andboost the portfolio value of the short position in this stock.