Explanation of Fund Categories
Tables on this page rank the top-performing mutual funds for 2002 for each of the main investment objectives as defined by research firm Morningstar Inc., which provided the data for these tables. Performance figures for 5,400 funds are on the following pages.
Most of the mutual funds that invest in the stocks of U.S. companies are sorted by Morningstar into nine broad categories. First, the funds are categorized by the average market capitalization of the stocks they own: large, mid-cap or small. (A stock’s capitalization is its share price times the number of its outstanding shares.)
The funds are further categorized by their basic investment objective: growth, value or a blend of the two. Among other criteria, growth-oriented funds tend to focus on stocks of companies that have, or are expected to have, robust earnings growth. Value funds look for stocks that appear to be underpriced relative to the underlying value of the company.
In the tables, these broad categories are identified as large growth (LG); mid-cap growth (MG); small growth (SG); large blend (LB); mid-cap blend (MB); small blend (SB); large value (LV); mid-cap value (MV); and small value (SV).
Domestic bond funds, which have 70% or more of their assets invested in bonds; international stock and bond funds, which have 40% or more of their holdings in foreign securities; and other types of funds such as specialty funds are categorized as follows:
* Long-term government (GL): At least 80% of bond portfolio invested in government issues with an average effective maturity of more than 10 years.
* Long-term investment grade (CL): Focus on corporate and other investment-grade securities with an average effective maturity of more than 10 years.
* Ultra-short-term (UB): Funds with an effective maturity of less than one year. Includes corporate and government bond funds.
* Intermediate-term government (GI): At least 80% of bond portfolio invested in government issues with average effective maturity of at least four years but less than 10 years.
* Intermediate-term investment grade (CI): Focus on corporate and other investment-grade securities with an average effective maturity of more than four but less than 10 years.
* Multi-sector (MU): Diversified among several fixed-income sectors.
* Short-term government (GS): At least 80% of bond portfolio invested in government issues with an average effective maturity of at least one but less than four years.
* Short-term investment grade (CS): Focus on corporate and other investment-grade securities with an average effective maturity of more than one but less than four years.
* High-yield (junk) (HY): At least 65% of assets in bonds rated below BBB.
* Muni long-term (ML): Owns primarily long-term municipal bonds.
* Muni intermediate-term (MI): Owns primarily intermediate-term municipal bonds.
* Muni short-term (MS): Owns primarily short-term municipal bonds.
* Muni California long-term (MC): Owns primarily long-term California tax-free bonds.
* Muni California intermediate-term (MF): Owns primarily intermediate-term California tax-free bonds.
* Foreign stock (FS): International stock fund with no more than 10% of assets invested in U.S. stocks.
* World (WS): International stock fund with more than 10% of assets invested in U.S. stocks.
* Europe (ES): At least 75% of assets invested in Europe.
* Latin America (LS): At least 75% of assets invested in Latin America.
* Diversified emerging markets (EM): At least 50% of assets invested in emerging markets.
* Japan (JS): At least 75% of assets invested in Japan.
* Diversified Pacific/Asia (DP): At least 65% of assets invested in Pacific Rim countries, with at least an additional 10% invested in Japan.
* Pacific/Asia (ex. Japan) (PJ): At least 75% of assets invested in Pacific Rim countries, with less than 10% invested in Japan.
* International bond (IB): At least 40% of assets invested in foreign markets, excluding emerging markets.
* Emerging markets (EB): At least 75% of assets invested in emerging-market bonds.
* Domestic hybrid (DH): Invests in a mix of stocks and bonds.
* International hybrid (IH): Invests in a mix of stocks and bonds, of which at least 40% is foreign.
* Convertibles (CV): Invests in bonds and preferred stocks that can be converted to common stocks.
* Specialty funds: Technology (ST); Communications (SC); Health (SH); Financial (SF); Real estate (SR); Utilities (SU); Natural resources (SN); Precious metals (SP).
The Pct. Load column lists sales charges or commissions; NL means no load. The Exp. Ratio column is the annual percentage of the fund’s assets paid for operating and management expenses, excluding sales charges.
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