All in the Family

Rating the best and worst fund companies

matter what the criteria. You probably won’t go wrong by narrowing your focus to these families. Also, the recent success of Janus makes it another prime contender.

For conservative investors, Robert Markman, who runs a suburban Minneapolis firm that bears his name, steers clients to Vanguard, which he calls “the Volvo of the world of mutual fund families.” He maintains that the company “exercises tight control over its portfolio managers. Vanguard wants them to stay in the middle-of-the-road so the performance is more predictable.” Best known for its index funds designed to track such market indices as the S&P 500, the fund family tends to offer low expenses which boost returns.

For bond investors, Marty Kelman, a certified financial planner with Memphis, Tennessee-based Kelman-Lazarov Inc., often recommends PIMCO funds to clients. Although PIMCO has traditionally focused on institutional investors, it has developed a group of funds for individuals, with minimum investments as low as $1,000. And for those who prefer broker-sold funds, consider American, Oppenheimer and Alliance-families that consistently received top grades.

Whether investing in an orphan or kin, take a long-term view-give your fund between three to five years to produce the ample results that you want. But if you find that your collection of funds are not up to snuff, take comfort in knowing that you can always leave home and find another family.

Results of
Wiesenberger survey:
Family % of Funds*
Vanguard 75.32%
American** 72.00
Fidelity 69.23
Morgan Stanley
62.50
Dean Witter
Oppenheimer 61.90
American Express 60.00
Merrill Lynch 56.25
AIM 50.98
Franklin 42.00
Putnam 41.67

*That beat category averages
**The American Funds family includes such popular funds as Washington Mutual Investors and Investment Co. of America.

Best Fund Families By Sector Best Fund Families By Sector
black enterprise asked Morningstar Inc., the Chicago-based mutual funds research firm, to evaluate the top fund families. It ranked them based on the three-year average return of fund families with assets of more than $5 billion. They are:

3-Year Fund Family # of Funds Average Return
DOMESTIC EQUITY
Legg Mason

8

28.93%
Janus

8

27.27
One Group

25

22.71
MFS

31

22.64
GMO

7

22.29
Morgan Stanley

8

21.94
Dean Witter

Diversified Investors

5

21.91%
MAS

7

21.59
BlackRock

23

21.50
Van Kampen

34

21.41
INTERNATIONAL EQUITY
Janus

2

22.56%
Phoenix

5

17.89
American

3

17.69
Harbor

2

17.18
Galaxy

2

15.19
Dreyfus Premier

7

14.84
STI Classic

6

14.40
Concert

2

14.40
Columbia

1

13.59
Founders

3

13.25
TAX-EXEMPT BOND
United Group

2

7.48%
Alliance

42

6.93
AAL

1

6.87
USAA

8

6.85
MAS

1

6.69
Norwest

9

6.59
Lord Abbett

14

6.46
Strong

4

6.4
Janus

1

6.31
Smith Barney

40

6.3
TAXABLE BOND
GMO

5

11.12%
BT Funds

2

10.7
Janus

3

9.49
Nicholas

1

8.5
PIMCo

17

8.43
State Street Research

8

8.22
Strong

7

7.8
Eaton Vance

10

7.79
Standard Ayer & Wood

7

7.65
United

6

7.61
Source: Morningstar Inc.
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