Although the top sectors may shift, funds have a lot more growing to do

摘要

It Was A Bittersweet Year for mutual funds. A wide-reaching trading scandal tainted the industry, ensnaring some of the nation's most venerable fund families. But happily, that didn't dampen performance. The average U.S. diversified equity fund earned a total return of 29.7%, vs. 24.1% for the Standard & Poor's 500-stock index through Dec. 12. Inflows have remained strong, too, with funds raking in more than $63 billion since the scandal broke in September. Christopher N. Brown, a financial adviser at Commonwealth Advisory Group in Gaithersburg, Md., says none of his clients is complaining to him that "the fund industry stinks. You get fewer calls when things are going up." Fund managers are quick to point out it will be tough to match 2003's stellar returns. "It's going to be a positive market, but none of us is going to send in our application forms to Mensa," says John G. Goode, manager of the $4.3 billion Smith Barney Fundamental Value Fund. Even so, Bill Miller, manager of the $13 billion Legg Mason Value Trust Fund, which is likely to beat the S&P 500 for the 13th year in a row, with a return of 35.4%, remains bullish. "As we look out over the next 12 months, it looks like smooth sailing for equities," he. says. Some of his favorite picks can be found in the fast-growing Internet arena, but he also likes advertising agency WPP Group and photo and imaging giant Kodak.