The year in stock mutual funds is turning out to be a mostly good one, according to Standard & Poor’s, which reports that the average domestic equity fund gained 12% through Nov. 26, trouncing the healthy 8.2% gains of taxable fixed-income funds.

Focusing on diversified stock funds, S&P mutual fund analyst Todd Rosenbluthin his Marketsope Advisor Trends and Ideasreport cites Morgan Stanley Focus Growth Fund (AMOAX) as a high-achieving large-cap fund, up 24% through Nov. 30, significantly above the 9% average of its peers. The fund outperformed in last year’s market as well, with a 73% return, but did not escape 2008’s carnage, losing 53%. The S&P report offers a word of caution about its concentrated portfolio (just 28 holdings), giving the fund four stars on its five-star scale.

Clearly, though, it was the concentrated portfolio that enabled the fund to stand out so far beyond its peers. And investors know what they’re getting into in a “focus” fund.

Yet a broad base of stocks and even low expenses is no guarantee of market-pacing performance. Witness Old Westbury US Large Cap Fund (OWLCX), which declined 0.4% through Nov. 30 — nearly 9% below its peers. The “relative quality of its holdings” and the “relatively low 1% net expense ratio” are among the factors that have earned this fund a respectable three stars from S&P, despite the fact that its weak performance this year is matched by weak performance in 2006 and 2008, garnering three- and five-year returns in the bottom quartile of its category.

Propelling AMOAX’s outperformance was its large winning bets on Ultra Petroleum (UPL), Baidu (BIDU) and Apple (AAPL). OWLCX didn’t make outsized bets, but was still hurt by weak performance by International Paper (IP), Cisco (CSCO) and Bank of New York (BK). In another year these could have gone another way. It’s well known that being bold in what you hold risks widely disparate results, yet the risk of  “less risky” managed portfolios should not be discounted.