USA Today All-Stars: Growth Leads Value

Smith Barney's Aggressive Growth fund leads the field in the 2006 Mutual Fund All-Star ratings from USA Today.

Managed by 22-year veteran Rich Freeman, the go-anywhere fund was bolstered in the survey's reporting period by mid-cap picks like UnitedHealth Group, Lehman Bros. and Anadarko Petroleum.

Freeman is optimistic about 2006, despite a relatively bearish outlook from the consensus.

"I think the surprises will be on the upside this year," remarked Freeman, whose fund is up 17% over the last five years.

USA Today All-Stars are selected for their steady performance over five years, and one big year won't put a fund on the list, but one off-year won't knock it from the field, either. Only diversified, open, U.S. stock funds are considered and the same manager must have been at the fund's helm for at least five consecutive years.

This year's theme was growth over value. Presence in the energy patch was another big factor. For instance, the Ariel fund from Ariel Capital Management of Chicago, which was last year's top All-Star, gained 8.2% but remained well-behind other mid-cap core funds because it didn't own any energy stocks.

Other exits from the All-Star list in 2006 include the Weitz Partners Value fund from the Kansas City, Mo.-based Weitz Funds, and the Thornburg Value fund from Thornburg Investment Management in Santa Fe, N.M. Although USA Today still characterizes those funds as "excellent choices" for an investor, other departures from its All-Star list simply performed too poorly over the last three years. They include the Thompson Plumb Growth fund from Thompson Investment Management in Milwaukee; the Jensen fund from Jensen Investment Management in Portland; and Boston-based John Hancock's Large-Cap Select fund.

Top performing All-Stars on the aggressive side of the ledger included Glendale, Calif.-based Pacific Advisors' Small Cap fund, which is up 134% over the last five years; Smith Barney's Aggressive Growth fund on the moderate side; and the Sound Shore fund from Sound Shore Management in Greenwich, Conn., a multi-cap value fund that's surged by 44% over the last five years, was the leader of the conservative field.

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.