During 2006, the asset classes that have been the leaders for several years continued to set the pace. Here are the numbers from Morningstar, through November:
Real estate mutual funds were up nearly 35 percent in 2006, bringing the annualized five-year return to almost 24 percent
Precious metals funds (which invest heavily in gold mines) returned close to 34 percent for the year-to-date, over 32 percent a year for the last five years.
Emerging markets funds gained more than 26 percent in 2006, the same annual pace as for the last five years.
Natural resources funds, which invest in commodities such as oil and gas, gained a comparatively modest 15 percent in 2006 but still showed annualized returns of nearly 23 percent for the trailing five years.
As a group, domestic equity funds (under 12 percent) lagged foreign stock funds (over 21 percent) in 2006. International funds have more than doubled the returns of U.S. stock funds in the last five years.
Among domestic stocks, small-company funds led large-company funds in 2006 and value stocks outperformed growth stocks. Morningstar’s small-value category, for example, was showing gains around 15 percent for 2006 and for the past five years. Large-growth funds, on the other hand, were up less than 7 percent for 2006 and a meager 2.86 percent a year for the past five years.
