The Marketocracy Masters 100 Fund (MOFQX). If you're a mutual fund investor, chances are there has been a time when you've loudly ranted about how you can do a better job than your fund manager. With this fund, you get the opportunity to be your own manager—at least kind of, and only if you beat out thousands of other investors. On Marketocracy.com, investors create hypothetical online portfolios; currently, there are roughly 30,000 active users. Of the portfolios they produce, Marketocracy takes its favorites—up to 100 at a time—and uses them to select the Masters 100's actual holdings. If your model is used, you get a small piece of the action. Manager Ken Kam says the fund's team vets the model portfolios thoroughly to weed out investors who are successful only by way of a fluke. "There's a lot of checking to make sure that it's not the result of one or two great stock picks over the last five years. We like to see good stock selection and good trading ability," he says. Overall, this quirky approach, which looks to achieve unparalleled diversity by blending many styles, has paid off at times, but its annualized returns over the past five years put it in the bottom quartile of Morningstar's mid-cap blend category.
The Vice Fund (VICEX). As its name suggests, this fund invests in "sin stocks," and its list of top holdings is littered with companies that conscientious investors love to hate: Philip Morris, Lorillard, British American Tobacco, and Altria. Mixed in with these big names in tobacco are defense and weapons giants like Lockheed Martin and Raytheon, beer companies such as Carlsberg A/S and Molson Coors, and some gambling picks. While sin stocks are often thought of as recessionproof, the fund has struggled quite a bit recently; year-to-date, it's in the bottom 3 percent of Morningstar's large blend category. Still, there have been some bright spots since the fund launched in 2002. Its annualized returns over the last five years rank it in the top third of its category. "I think this has been a pretty good decade for sin stocks," says Kinnel. Even so, he remains skeptical about the fund's narrow focus, pointing out that its bread-and-butter picks could easily fall out of favor over the next few years.
[See Are Sin Stocks Recessionproof?]
The Monetta Young Investor Fund (MYIFX). Ever wonder what would happen if you put your third-grade child in charge of a mutual fund? Chances are it would include plenty of Disney and McDonald's shares. It's no coincidence that those companies are among this fund's top holdings. And while Monetta doesn't literally have an army of elementary school students serving as its stock pickers, one of its stated purposes is to act as if it did. That's because the fund, which invests half of its portfolio in exchange-traded funds and other index funds and the other half in companies that are familiar to young children and teenagers, looks to help parents get their kids interested in investing. Apart from picking stocks that kids readily recognize, the fund offers to mail shareholders finance-related games and activities for children and lets families accumulate rewards points that can help pay for college tuition. If its recent performance holds up, Monetta Young Investor's returns can also go a long way toward anchoring college savings: So far this year, the fund is up 48 percent.
The Timothy Plan Aggressive Growth Fund (TAAGX). Have you ever wanted a complimentary moral audit? On this fund's website, that's only one of several services offered to potential clients who are interested in investing in accordance with Christian values. There's also a "Hall of Shame," which lists companies the fund avoids, and a section to help parents identify potentially offensive video games. Like the other Timothy Plan funds, the Aggressive Growth Fund stays away from companies that are connected to alcohol, tobacco, gambling, abortions, pornography, or same-sex marriage. While the Timothy Plan funds have plenty of company in the religious and moral investing space, their offerings stand out for their rigorous screens and strong wording: The company explicitly evokes the "culture war" that its funds are fighting. While these commitments offer a reasonable outlet for shareholders who prefer to invest in accordance with their religious beliefs, the strategy has not been particularly profitable for the Aggressive Growth Fund. Its annualized returns over the last one, three, and five years all place it in the bottom quartile of Morningstar's mid-cap growth category.
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VOLVO FAN of AZ 8:56AM December 10, 2009
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