The results, or should we say returns, are nearly all in and it appears that mid-cap funds finally unseated small-cap funds, which ruled the industry for more than five years.
U.S. investors also chased performance - both here in the U.S. and abroad - the results show, and funds in narrow sectors, like utilities, real estate and energy, did much better than those with diversified holdings, according to a report from The Wall Street Journal.
The biggest winners in the U.S. in 2005 were the Philadelphia-based Gartmore Global Natural Resources Fund and the Guinness Atkinson Global Energy Fund in Woodland Hills, Calif., as each posted returns of more than 60%.
Among sectors, natural resources scored best by delivering average returns of nearly 40%. In addition, according to The Journal, growth gained more ground on value in 2005.
"We said it would be a stock-picker's year, and it was," said Don Cassidy, a senior research analyst with fund tracker Lipper in Denver. "Investors were particularly fickle and short-term driven," dabbling even in gold funds.
The best bets appear to have been abroad. World stock funds posted returns of 17.68%, which is more than twice the 7.42% that the average U.S. diversified stock fund returned. As a result, international investment commanded more than half of the net $240 billion in mutual fund flows last year, through November. That's up by 63% versus the same period last year, The Journal reported, citing data from Financial Research Corp. in Boston.
While mutual fund flows overall were flat last year, life cycle, or life-stage, funds were popular, as they drew more 401(k) retirement account money. More broadly, investors favored stock mutual funds over bond mutual funds by an inflow margin of $125 billion versus $33.2 billion.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.