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Russell Pearlman, SmartMoney senior markets editor, on why now may be the time to invest in mutual funds, despite their rough year in 2011.
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Now that you might want to take a second look as -- go into the year and the industry's been hard hit but there are some sons that are outperforming.
The broader market and the team -- Smart money already did all the hard work in all the dirty details -- -- top 100 mutual funds even getting to right now joining us is Russell Pearlman senior markets editor at Smart money Russell it was a tough year for mutual funds absent group.
But you did some digging and he found some -- actually really great performers compared to the broader and.
That's right certainly 2011 was six exceptionally tough for any active manager whether there and a mutual fund or hedge fund because of all the volatility.
An overwhelming majority of people missed their benchmarks however.
Over five years folks that we looked at have consistently outperform their indexes that their benchmark again it's.
Whether it's a stock index -- foreign stock index -- bonds.
And so we kind of long cold obviously who is done exceptionally well over five years.
Five years but a lot of time in the markets right now you know we had like two epic rallies managed crash.
And then a year's worth of just going up and down roller coaster so we came up with.
-- hundred funds in four different categories US stocks foreign stocks bonds and kind of alternative.
Have a catch -- for everything else whether it's gold commodities options.
Universalist -- with the US stock funds what's what's once stood up one for us are really stuck out how to get there are 25 -- really stuck apple won't we really liked was the gap in funds.
This is a family owned shop out of Austin, Texas.
They look at most times large companies with predictable revenue streams one of their big ones that they really -- -- PepsiCo because good economy are bad people or eating.
To read -- and Frito-Lay which is what they really liked -- and secondarily they're also buying.
Pepsi and all kind of the juices that that PepsiCo offers.
What about on the far its -- I'm on the -- inside the -- they like the so -- -- international small cap.
We actually like kind of -- the where -- can active managers can really make their bones.
Is in small -- where there's not a lot of analysts covering them so the west for folks think the thousands of small companies out there and reducing the 36.
They've got a 140 million dollars in assets and right now they like industrial firms all around the world and they're not afraid to go to Europe you also like.
It right this international bond fund which is interesting because -- government day US at corporate corporate debt but I want to talk about the -- -- -- -- -- sort of go anywhere -- bucket does a little bit of everything why is that.
-- -- -- -- these guys aren't afraid to kind of abandoned an asset class if they think it's really bad these guys made a big -- in cash.
In 20072008.
-- -- laugh at him -- in 2007.
But it turned out -- a great idea in 2008.
These days they're actually two thirds of the stock market now and then they do everything from loaning office loaning.
An office building money.
That by farmland.
-- extremely low turnover so they're willing to go in almost anything in everywhere.
And the boss -- Steve drama is -- -- a really good job management people's money over the long haul but again in the short term.
They're not afraid to -- have egg on their face.
For a year if it turns out over the long run -- the right -- trade idea is in the mutual fund space Russell Pearlman a Smart money thank you for this bank.
