Charting Your Course

How to translate last year's market lessons into this year's profits

to taxable Treasuries or corporate bonds. “Municipal bonds usually make sense for almost any investor who is in a 28% federal tax bracket or higher, because they offer a higher after-tax yield than Treasury bonds,” says Louis Stanasolovich, a financial planner in Pittsburgh. “Recently, municipal bonds offered yields that were 93% of those on 30-year Treasury bonds.” That is, if Treasuries are yielding 6.5%, which might translate to a 4.5% after-tax return, you’d be better off earning 6% with tax-exempt municipal bonds.

To help you round out your portfolio, we’ve included top long-term bond funds (taxable and tax-exempt) on the accompanying honor roll, as well as balanced funds (hybrids) that include both bonds and stocks. Don’t get carried away with bond funds, though. The bull market that has stampeded through the 1980s and 1990s shows no signs of ending, so you’ll need a healthy portion of stock funds to keep your portfolio headed in the right direction-up.

B.E.’s TOP MUTUAL FUND PERFORMERS

 

AVG. ANNUALIZED TOTAL RETURN

 

FUND NAME

TICKER

1-YEAR TOTAL RETURN

3-YEAR

5-YEAR

PHONE

MIN. INIT INVEST.

ASSETS (in millions)

Large Growth
ProFunds UltraOTC Inv UOPIX 233.25% N/A% N/A% 888-776-3637

$15,000

$337.45

Berkshire Focus BFOCX 142.90 N/A N/A 877-526-0707

5,000

13.00

Reserve Informed Investors Growth R RIGAX 129.86 51.43 35.61 800-637-1700

1,000

4.72

Potomac OTC Plus POTCX 129.41 N/A N/A 800-851-0511

10,000

74.54

IPS Millennium IPSMX 118.80 55.05 N/A 800-232-9142

1,000

61.65

Mid-Cap Growth
Nevis Fund NEVIX 286.53 N/A N/A 877-446-3847

10,000

31.33

Strong Enterprise SENTX 187.84 N/A N/A 800-368-1030

2,500

110.28

IPS New Fr
ontier
IPSFX 182.09 N/A N/A 800-232-9142

1,000

2.50

PBHG Select Equity PBHEX 164.68 49.86 N/A 800-433-0051

2,500

196.36

Berger Mid Cap Growth BEMGX 151.46 N/A N/A 800-333-1001

2,000

25.45

Small Growth
Van Wagoner Post-Venture VWPVX 237.22 59.71 N/A 800-228-2121

1,000

128.50

BlackRock Micro-Cap Equity Class A BMEAX 220.64 N/A N/A 888-825-2257

5,000

.69

Van Wagoner Micro-Cap VWMCX 207.88 40.85 N/A 800-228-2121

1,000***

139.81

RS Emerging Growth RSEGX 182.51 62.45 44.36 800-766-3863

5,000

1,388.29

RS Diversified Growth
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