10 Funds That Enticed Investors in 2012

A handful of the biggest, most-trusted bond funds soaked up a large portion of this year’s inflows.

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Vanguard Total International Stock Index

Inflows: $10 billion

Assets under management: $73.3 billion

With more than 6,000 stock holdings, this fund packs quite a lot of diversification into one single offering. The fund seeks to replicate the MSCI All Country World ex USA Investable Market Index. As such, it offers exposure to countries throughout the globe. Overall, the fund's largest exposure is to Asian and European countries, which together account for more than 85 percent of its stock holdings. While most of the fund's holdings are in developed countries, investors also get exposure to emerging markets.

Lord Abbett Short Duration Income

Inflows: $7.7 billion

Assets under management: $25.3 billion

This fund is not afraid to play around with low-quality bonds. As of the end of June, roughly half of its portfolio was invested in bonds with a credit quality of BBB or below. Relative to its Morningstar peers, it also has hefty exposure to commercial mortgage-backed securities. On the other end of the spectrum, the fund had, as of the end of June, only negligible exposure to government bonds. The fund is growing at lightning speed. For instance, in November 2007, it had just $116 million under management, according to Morningstar.

PIMCO Income

Inflows: $7.1 billion

Assets under management: $15.1 billion

This multisector bond fund has had a stellar 2012. Through October 26, it was up more than 18 percent this year. It has also been a steady performer, with its trailing three- and five-year returns landing it in the top 2 percent of Morningstar's multisector bond category. The fund's portfolio consists mostly of government, corporate, and securitized bonds. Relative to its peers, it has somewhat hefty exposure to mortgage-backed securities.

Vanguard Total Stock Market Index

Inflows: $7.1 billion

Assets under management: $179.1 billion

This fund seeks to replicate the MSCI US Broad Market Index. Like the rest of Vanguard's index lineup, it tracks its index at an affordable rate, as evidenced by its 0.17 percent expense ratio. With nearly 3,300 stocks in its portfolio, the fund also offers quite a bit of diversification.

Vanguard Total Bond Market Index

Inflows: $6.5 billion

Assets under management: $97.2 billion

This passively managed fund seeks to replicate the returns of the Barclays Capital U.S. Aggregate Float Adjusted Index. As such, it owns mostly high-quality bonds. As of the end of June, its average credit quality was AA. Vanguard is well known for its low-cost index funds, and this offering, which boasts an expense ratio of 0.22 percent, is no exception.

Invesco Balanced-Risk Allocation

Inflows: $5.7 billion

Assets under management: $9.5 billion

This fund has been growing quickly since its June 2009 launch. However, investors should understand what they're getting into. The fund follows a somewhat atypical strategy and tends to have hefty exposure to commodities and leveraged bonds. In addition, the fund has quite a bit of exposure to Austria, Canada, Japan, and the United Kingdom.

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JPMorgan Large Cap Growth

Inflows: $5 billion

Assets under management: $8.6 billion

This fund has outpaced all other active stock funds in term of inflows in 2012, but its performance has been relatively lackluster this year. The one bright spot for the fund has been its exposure to Apple, which has juiced the fund's returns and kept it competitive. As of the end of August, Apple accounted for more than 10 percent of the fund's portfolio. Morningstar describes the fund's hefty Apple exposure as "perhaps an inevitable outcome of manager Giri Devulapally's market-conscious approach."

JPMorgan Core Bond

Inflows: $4.5 billion

Assets under management: $28.6 billion

Manager Douglas Swanson has been with this fund since 1991. Relative to its peers, the fund has significant exposure to agency pass-through securities and low exposure to corporate bonds. The fund rarely stands out in any given year, but it has been a steady performer. This has accounted for some of the fund's popularity and resulting inflows.