March 4, 2004 — In short, 2003 was a good year to launch a new mutual fund, especially stock portfolios, which benefitted from robust and rebounding markets around the world.
FundAdvisor discovered a total of 27 mutual funds — 17 equity, 6 fixed-income, two hybrids, and two money markets — that came into being in December, 2002. A year later, all those portfolios showed gains.
By contrast, only 17 funds were launched in December 2001, turning one year old at the end of 2002.
A good portion of the new equity funds for 2003 invest in small-cap stocks. Indeed, the top performer from this batch was the Federated Kaufmann Small Cap Fund/A (FKASX), which soared 81.6% in calendar 2003. The portfolio has $316-million in assets currently.
Interestingly, among the new equity offerings, none were dedicated sector funds, and only one invests in overseas stocks.
The number of new bond funds decreased from eight in the prior year, perhaps not surprising, given the end of the bull market for fixed-income securities, and widespread concern that the Federal Reserve is poised to raise interest rates this year.
However, all new non-equity funds were in the black for 2003. Harbor High Yield Bond/Institutional (HYFAX) ranked as the year’s top bond fund with a handsome 19.7% return.
– Palash R. Ghosh