What a difference a month makes.

After a weak October, stocks rallied in November, driven primarily by moderating crude oil prices, tame inflation, strong new home sales, surprisingly robust third-quarter GDP growth, and better-than-expected consumer confidence. The data fuelled optimism that the national economy may have overcome this summer’s devastating Gulf Coast hurricanes.

November witnessed both the S&P 500 and NASDAQ indices reaching 4-1/2-year highs. The Dow rose to its highest level since March 2005. For the month, the average domestic stock mutual fund gained 4.15%, while the S&P 500 climbed 3.52%, and NASDAQ advanced 5.31%.

U.S. equity funds rose across the board in November, with growth-oriented portfolios outperforming value offerings. Small-cap growth funds delivered the best performance for the month, rising 5.24% on average. Year-to-date, mid-cap growth funds have risen 8.61%, which put them at the top of the list. All fund style categories are in positive territory, both for the month and year-to-date periods.

From the start of the year through the end of November, the average stock fund has gained 6.25%. Over that period, the S&P 500 rose 4.61%, the NASDAQ climbed 2.64%, and the Dow is essentially flat, up only 0.21%.

Standard & Poor’s Global Investment Policy Committee (IPC) cited the positive economic environment in discussing the November rally. “Inflation fears appear to have receded,” IPC said in a statement. “Benign core CPI data, coupled with indications in the November FOMC minutes that an end to Fed tightening is approaching, have bolstered investor confidence in future growth prospects.”

November began with the Federal Reserve hiking its target rate by 25 basis points, as was expected, to 4.00%. Moreover, minutes from the Fed’s latest policy meeting during the month seemed to indicate that the central bank may soon cease tightening.

Energy prices, which have declined sharply, also provided some relief, particularly to consumers’ pocketbooks. Crude oil prices closed under $60 per barrel for the month, falling from a record high of nearly $71 at the end of August when Katrina wreaked havoc on the global petroleum industry. But the price of oil is still up for the year, and may remain a dampening force on consumer spending and the overall economy. IPC expects the price of WTI crude to finish the year at $63.

Investors will no doubt examine the results of the Thanksgiving holiday retail activity and the upcoming jobs report as further confirmation of the sustainability of an apparently strengthening economy.

Looking forward, the IPC said “the major stock indexes are very overbought on a daily basis, and we believe the market will pull back in the near term. However, following a pause in the rally, we think the stock market will reach new recovery highs before a likely correction sets in sometime in first quarter 2006.”

Below is a list of the best- and worst-performing domestic stock funds according by style category for both November 2005 and the year-to-date period.

Fund Investment Style

Average Returns November 2005 (%)

Average Returns YTD 2005 Through 11/30/2005 (%)

Large-Cap Growth

+4.18

+6.04

Large-Cap Value

+3.42

+5.18

Large-Cap Blend

+3.50

+4.81

Mid-Cap Growth

+5.06

+8.61

Mid-Cap Value

+4.30

+7.76

Mid-Cap Blend

+4.37

+8.48

Small-Cap Growth

+5.24

+6.46

Small-Cap Value

+4.16

+6.73

Small-Cap Blend

+4.27

+6.15

All-Cap Growth

+4.13

+6.59

All-Cap Value

+3.60

+6.02

Domestic Equity Funds*

+4.15

+6.25

S&P 500-Stock Index

+3.52

+4.61

Domestic Equity Funds* — November 2005 Returns

Best Individual Performer

Returns (%)

Worst Individual Performer

Returns (%)

Large-Cap Growth Rydex Dynamic Funds:Velocity 100 Fund/A (RYVLX)

+11.71

Rydex Dynamic Funds:Venture 100 Fund/C (RYCDX)

-10.62

Large-Cap Value American Growth Fund/D (AMRGX)

+7.72

Philadelphia Fund (PHILX)

+0.50

Large-Cap Blend Legg Mason Eq Tr:Value/Instl (LMNVX)

+7.49

Rydex Dynamic Funds:Inverse Dynamic Dow 30/C (RYCZX)

-6.89

Mid-Cap Growth AllianceBernstein Mid-Cap Growth/R (CHCRX)

+10.08

Ameritor Investment Fund (AIVTX)

-11.11

Mid-Cap Value TCW Galileo Value Opportunities Fund/I (TGVOX)

+7.18

Longleaf Partners Fund (LLPFX)

+0.62

Mid-Cap Blend ProFunds:UltraMid Cap/Inv (UMPIX)

+9.45

ProFunds:UltraShort Mid Cap/Svc (UIPSX)

-8.63

Small-Cap Growth Kopp Emerging Growth Fund/Instl (KEGIX)

+12.75

Jundt US Emerging Growth Fund/C (JEGCX)

-2.33

Small-Cap Value TCW Galileo Value Added Fund/I (TGSVX)

+7.70

Nicholas-Applegate US Small Cap Value/I (NASVX)

-0.99

Small-Cap Blend ProFunds:UltraSmall Cap/Inv (UAPIX)

+8.94

Potomac Small Cap/Short/Investor (POSSX)

-9.03

All-Cap Growth Westcore Fds Select Fund (WTSLX)

+7.46

American Heritage Growth Fund (AHEGX)

0.00

All-Cap Value Legg Mason Opportunity Trust/Instl (LMNOX)

+10.36

Third Avenue Value Fund (TAVFX)

+0.80

Domestic Equity Funds* — Year-to-Date Returns Through 11/30/05

Best Individual Performer

Returns (%)

Worst Individual Performer

Returns (%)

Large-Cap Growth Morgan Stanley Aggressive Equity/D (AEQDX)

+22.31

Reynolds Funds Opportunity Fund (ROPPX)

-9.19

Large-Cap Value Bryce Capital Value Fund

+16.88

Dreyfus Premier Select/J (THPSX)

-7.47

Large-Cap Blend Jennison 20/20 Focus Fund/Z (PTWZX)

+20.49

Wells Fargo Advtg Large Company Core/B (WLCBX)

-16.59

Mid-Cap Growth Hennessy Focus 30 (HFTFX)

+32.97

Ameritor Investment Fund (AIVTX)

-63.64

Mid-Cap Value CGM Capital Development Fund (LOMCX)

+22.84

ING Mid Cap Value Fund/B (IMVBX)

-7.14

Mid-Cap Blend ProFunds:UltraMid Cap/Inv (UMPIX)

+17.62

ProFunds:UltraShort Mid Cap/Svc (UIPSX) -19.48

-19.48

Small-Cap Growth Bridgeway Fund:Micro-Cap Limited Fund (BRMCX)

+28.36

Frontier MicroCap Fund (FEFPX)

-29.63

Small-Cap Value CGM Focus Fund (CGMFX)

+22.89

Ameritor Security Trust Fund (ASTRX)

-9.09

Small-Cap Blend Schwab Small Cap Equity Fund/Select (SWSCX)

+17.62

Potomac Small Cap/Short/Investor (POSSX)

-12.62

All-Cap Growth Permanent Port Family of Fds Aggressive Grth (PAGRX)

+21.01

American Heritage Growth Fund (AHEGX)

-42.86

All-Cap Value Leuthold Select Industries Fund (LSLTX)

+20.23

Weitz Value Fund (WVALX)

-3.44

*Excluding sector and balanced funds.

Source: Standard & Poor’s. Total returns include reinvested dividends. Preliminary data as of 11/30/05.

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