From the May 2009 issue of Research Magazine • Subscribe!

May 1, 2009

Commodities Shine in Early '09

Silver, copper and lead funds rose as much as 39 percent in the period. And the Tocqueville Gold Fund (TGLDX) moved up 19 percent. The new world-stock Encompass Fund (ENCPX) did even better, jumping nearly 29 percent in the first quarter.

The Lipper Equity Mutual Fund Indices were generally down for the quarter, and all were negative performers for the past 12 months. In the first three months of 2009, though, the science and technology index rose 4.36 percent, gold was up 12.07 percent, and convertible securities increased 1.29 percent.

For the past 12 months, however, all the fund indexes had dropped from 18.69 percent to 57.05 percent. Health care/biotech funds decreased by about 18.7 percent, income funds dropped by about 20 percent and balanced funds fell nearly 27 percent. Gold funds had an average decline of 28.47 percent from March 2008 to March 2009.

Fund Flows

Heading into April and the second quarter of 2009, EPFR Global-tracked money market funds posted about $9 billion of outflows. Investors moved out of cash for a fourth-straight week, during which time they have removed about $57 billion from these funds, says the research group.

During the week ending April 1, flows benefited riskier asset classes such as emerging market equity ($1.2 billion) and high-yield bond funds ($796 million).

"Despite the uncertainty generated by the G-20 policy disagreements, money is still coming off the sidelines, with some of it finding its way into riskier, more rewarding asset classes," says EPFR Global Managing Director Brad Durham. "It also appears that emerging markets are, again, getting their due for their better growth prospects and the fiscal reforms they made in the aftermath of the 1997 Asian currency crisis."

For more information on mutual-fund performance and details regarding Lipper's fund screening, go to: www.lipperweb.com/research/fund.asp

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