'Rising Tide Growth' vs Mid Cap Growth Mutual Fund Peers

I am going to start posting monthly results versus my peer group of mutual funds, now that the fund is approaching 9 months old. Obviously shorter term time frames could be attributed to luck, randomness, or other things... hence why I want to look at a minimum of 1 year time frame, and when I assess mutual funds myself I tend to look at 3 year time frames.

To review, my goal is to beat the indexes I track by 15% a year, so if the indexes do 0%, I want to do 15%... if the indexes do 15%, I want to do 30%... if the indexes do -15%, I want to hit 0%. That would put me in elite company. The indexes I track are the S&P 500 and Russell 1000 as the median market capitalization of my holdings has been in the range ($7-$9 Billion) in between those 2 indexes. When I checked last fall, the S&P 500 median market cap was $13.1 Billion and Russell 1000 $5.8 Billion. I post my results versus indexes weekly, and thus far have been able to surpass my 15% goal in just under 9 months.

That is my index comparison; now of course I want to be consistently near the top of the heap versus my real competition - so we need to compare this fund versus similar ilk out there in mutual fund world. The 2 main categories of funds are the "size" of their holdings and the "style" of their holdings. From that you get put into one of 9 broad categories - see the illustration. According to Morningstar and Lipper, the 2 main ratings agencies for mutual funds, in size I'd fall into the mid cap designation (this would be the size of the typical holdings I own). Large caps are more of the GEs, Exxons, Microsofts of the the world - and small caps are generally names smaller than I hold. Further, mutual funds are broken into 3 broad categories depending on the type of stocks they own - value, growth, or "blend" (a mix of value and growth). Obviously I am targeting growth, although an arguement could be made I'd fall into a range between growth and "blend". According to Lipper, there are 1871 mutual funds as my competition in this category.

This is important because I am not a China fund, a natural resources fund, a real estate fund, a gold fund, etc - every year some niche category outperforms and you cannot compare a broad based equity fund that invests in multiple sector with those groups. For example, tech mutual funds were all the rage in 99, real estate mutual funds were all the rage in 03-04, Chinese mutual funds were all the rage in 06, natural resource funds were all the rage in 07. Etc. So we'll never top the heap of that niche group, but those are specialized funds who usually have a good shorter term run, before imploding a few years later. (ask any tech fund investor in 2001, any real estate fund investor in 2007, or Chinese fund investor the past 6 months)

So at this time I have nearly a 9 month record, and not a full 1 year record. I am going to use the Kiplinger's rankings found here. Unfortunately, unlike stocks - most of the free screeners for mutual funds are quite useless, so this is the best I can find; the one on Morningstar does not screen out multiple versions of the same fund. I will begin keeping track of my NAV (price for the mutual fund) at the end of every month and will, within a quarter, have a good apples to apples comparison. Right now since my return is through yesterday, and only 9 months old, and the Kiplinger table is through March 31, 2008, and 12 months old it is not apples to apples. But if current trends continue I should be near the top of the peer group of 1871 funds.

Rising Tide Growth is currently printing a 17.7% return; this would compare favorably to peer group if the pace continues, and place it as the #1 fund in the category. (again it is not apples to apples since I have not yet reached a year time frame and won't until July 31, 2008 - also I am using yesterday's price not Mar 31st since I don't have exact historical data available to me in Marketocracy.com)

The current top 5
Janus Orion 15.0%
American Century Giftrust 14.2%
Prasad Growth 14.2%
American Century Heritage 14.1%
ING Mid Cap Opportunities 9.8%

To put it in perspective further, the 25th best fund returned 5.1% over the past year, and the average for the entire group of 1871 funds was -3.5%

This is the first time I have looked at this, and I'll start updating this on a monthly basis

EDIT: My results do not account for any annual expenses or taxes; hence "real returns" will be lower. I cannot tell if the peers I am comparing against account for them either, from the way the data is presented. The idea here is to show directionally the performance, the exact placement is subject to debate, but a top 25 ranking should be assured either way if trend continues.