Top Rated Mutual Funds for 2011: AlphaProfit to Provide Best Large Cap Funds and Best Small Cap Funds for 2011
The AlphaProfit No Load Fund Growth model portfolio will be reconstituted on February 17 with top rated mutual funds in the large cap, small cap, foreign, and specialty categories.
Markets around the globe have generally been strong ever since Federal Reserve Chairman Ben Bernanke laid out his plan for Quantitative Easing Phase 2 in late August of 2010.
In the US, the S&P 500 ($SPX) is up 28%. Small-cap stocks have fared better than large cap stocks. The iShares Russell 2000 Index ETF (IWM) is up 37% compared to the SPDR S&P 500 ETF's (SPY) 28% gain.
From a style perspective, growth has fared better than value. iShares Russell 2000 Growth Index ETF (IWO) that focuses on small-cap growth stocks has gained nearly 41%.
Discussing the recent performance of the US stock market, Dr. Sam Subramanian, Managing Principal of AlphaProfit Investments, LLC and Editor of AlphaProfit's Premium Service Investment Newsletter said, "Small-cap companies are relatively insulated from the negatives abroad. Small-cap growth stocks have prospered against the backdrop of rising profits and low interest rates."
"In 2011, we are seeing some style rotation as valuation metrics of large-cap stocks have become compelling. Large-cap mutual funds are leading small-cap mutual funds this year. In the ETF space, SPDR Dow Jones Industrial Average ETF (DIA) is leading the iShares Russell 2000 Index ETF in 2011." Dr. Subramanian noted.
Meanwhile, overseas markets have generally lagged the US market. The re-surfacing of the European sovereign crisis in late 2010 restrained returns in the European continent. The MSCI EAFE Index ETF (EFA) is up 22%.
Emerging markets have lagged even more as rising interest rates and political tensions have pressured returns. The Vanguard Emerging Markets Stock ETF (VWO) has risen just 14%.
From a regional perspective, Pacific ex-Japan fared the best. The iShares MSCI Pacific ex-Japan ETF (EPP) is up 22%. Protests in Egypt took a toll on Middle East & Africa particularly in 2011 and limited gains in this region. The SPDR S&P Emerging Middle East & Africa ETF (GAF) is up 12%.
Commenting on global market returns Dr. Subramanian said, "Emerging markets face some headwinds in the form of rising inflation and interest rates. After riding Matthews India Fund (MINDX) to a sizeable gain in 2010, our decision to exit out of this mutual fund in late 2010 has proved timely in retrospect. Indian stocks are the second worst performer in 2011, only behind Egypt."
Top Rated Mutual Funds for 2011 - Large Cap, Small Cap, and Foreign
AlphaProfit's no-load, no-transaction fee growth model portfolio has gained at a 32% annual rate since the start of 2009, well in excess of the 22% rate for its benchmark comprising of broad US and foreign indexes.
The portfolio's outperformance was driven by market-beating performance of individual fund recommendations. Here are some specifics:
During the past 2 years, AlphaProfit subscribers benefited from the performance of foreign funds Matthews India and Wasatch International Growth (WAIGX) that rose 161% and 120%, respectively. Among US mutual fund recommendations, Aston/Optimum Mid Cap (CHTTX) and Baron Opportunity (BIOPX) more than doubled.
In the past 6 months, AlphaProfit subscribers have gained over 30% from their investments in foreign mutual fund Fidelity International Small Cap (FISMX) and small-cap growth mutual fund Janus Triton (JATTX).
The no-load, no-transaction fee growth model portfolio will be repositioned with top rated mutual funds on February 17.
Looking ahead to the repositioning, Dr. Subramanian said, "While small-cap growth mutual funds have been crushing the averages in recent months, their continued leadership is far from certain. Sustained improvement in the job market is likely to prompt the Federal Reserve to become less accommodative in its monetary policy. And, sooner or later, the market will start to discount higher US interest rates."
Dr. Subramanian added, "Investors also need to be more discerning with emerging markets investments. It will not surprise me if emerging markets stocks lag US stocks in 2011 as long as the interest rate cycle remains unfavorable in emerging economies."
"Our first order of business is to help subscribers protect recent gains. We would also be looking to AlphaProfit's proven style rotation and fund selection system to help subscribers invest in the best funds in the best styles and asset classes to get a leg up on the market," concluded Dr. Subramanian.
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AlphaProfit Investments, LLC is an independent investment research firm based in Sugar Land, TX. AlphaProfit publishes the AlphaProfit Sector
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