How the Biggest Funds Fared
Last year was supposed to be a time for investors to play it safe, as blue-chip stock funds were expected to dominate the aging bull market. But after the economy proved stronger than expected in 2006-and after the Federal Reserve stopped hiking interest rates-it turned out to be another year for investing dangerously. Among the 25 largest mutual funds, the best performers last year were those that ventured abroad. Among them: Fidelity Diversified International, which was up nearly 23 percent, and American Funds Capital World Growth & Income, up 22 percent. In general, riskier assets led the rally. Emerging-markets stock funds soared 32 percent last year. And U.S. funds that invest in small companies beat large-cap funds for the sixth straight year.
| FUND NAME | CATEGORY | 4TH QTR. | 1-YEAR | 3-YEAR* | ASSETS IN BIL. |
| American Funds Growth Fund of America | Large growth | 6.46 | 10.94 | 12.37 | $161.2 |
| Vanguard 500 Index | Large blend | 6.67 | 15.64 | 10.30 | 117.7 |
| PIMCO Total Return | Intermediate-term bond | 0.93 | 3.99 | 4.01 | 100.1 |
| American Funds EuroPacific Growth | Foreign large blend | 8.68 | 21.87 | 20.89 | 95.3 |
| American Funds Investment Co. of America | Large value | 5.37 | 15.94 | 10.80 | 88.7 |
| American Funds Washington Mutual | Large value | 6.35 | 18.04 | 10.34 | 84.0 |
| Vanguard Total Stock Market Index | Large blend | 7.04 | 15.51 | 11.26 | 83.8 |
| American Funds Capital Income Builder | World allocation | 8.11 | 22.04 | 14.56 | 80.9 |
| American Funds Capital World Growth & Inc | World stock | 9.14 | 22.36 | 18.79 | 80.0 |
| American Funds Income Fund of America | Moderate allocation | 6.67 | 20.29 | 11.99 | 76.4 |
| Fidelity Contrafund | Large growth | 6.45 | 11.52 | 14.26 | 68.8 |
| Dodge & Cox Stock | Large value | 6.54 | 18.53 | 15.60 | 64.8 |
| Vanguard Institutional Index | Large blend | 6.69 | 15.79 | 10.43 | 64.3 |
| American Funds American Balanced | Moderate allocation | 4.66 | 11.81 | 7.89 | 55.9 |
| American Funds New Perspective | World stock | 8.12 | 19.87 | 15.08 | 52.5 |
| Franklin Income | Conservative allocation | 6.48 | 19.12 | 10.82 | 52.2 |
| Vanguard Windsor II | Large value | 6.60 | 18.25 | 14.40 | 47.4 |
| Fidelity Magellan | Large growth | 5.04 | 7.22 | 7.04 | 46.0 |
| Fidelity Diversified International | Foreign large growth | 9.80 | 22.52 | 19.78 | 45.8 |
| Vanguard Wellington | Moderate allocation | 5.48 | 14.93 | 10.93 | 45.2 |
| Davis NY Venture | Large blend | 7.65 | 15.12 | 12.71 | 43.7 |
| Vanguard Total Bond Market Index | Intermediate-term bond | 0.93 | 3.83 | 3.49 | 39.9 |
| Fidelity Low-Priced Stock | Midcap blend | 9.78 | 17.76 | 16.08 | 38.8 |
| American Funds Fundamental Investors | Large blend | 7.24 | 19.24 | 14.90 | 38.4 |
| Templeton Growth | World stock | 8.31 | 21.81 | 15.51 | 35.8 |
| Standard & Poor's 500 | 6.70 | 15.79 | 10.44 |
Source: Morningstar Inc. *3-year return is annualized.
This story appears in the January 15, 2007 print edition of U.S. News & World Report.