U.S. Stocks

Kiplinger's Personal Finance Magazine, August, 2000 by Justin Wiser

OUR RANKINGS of more than 1,000 funds begin with those that invest in stocks of U.S. companies. Stock funds are divided into six categories. AggGro (aggressive-growth) funds seek maximum capital gains, often in somewhat volatile small-company stocks. Growth (long-term-growth) funds also seek capital gains but tend to invest in stocks of larger, more stable companies. Gro-Inc (growth-and-income) funds concentrate on safety and dividend income. Balanced funds invest for income by holding bonds as well as stocks. Sector funds limit investments to one industry or economic sector.

Utility funds own primarily stocks of utilities and usually emphasize yield. To be included, a fund must have at least a one-year track record and usually at least $1.1 billion in assets. Smaller funds are included if they are among the best performers (see "And the Winners Are ..." on page 57). Some funds aren't available in all states.

Benchmarks. At the bottom of each page of stock rankings are benchmarks to help you assess a fund's performance. Standard & Poor's 500-stock index is the most widely used barometer of large-company stocks; total returns assume that dividends were reinvested. Average U.S. stock fund figures are the average total returns of all domestic stock funds except precious-metal funds. Other useful benchmarks for the one-, three- and five-year periods to June 12 are in the small table at left. Use the Dow Jones industrial average to compare with funds that hold primarily blue-chip stocks, the Russell 2000 for funds that hold small-company stocks and the Wilshire 5000 as a measure of the entire U.S. stock market. For a complete description of each column heading.

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While you can sort and select among 4,000 funds at our Web site (www.kiplinger.com), the software offers additional options and slightly later data.

                                  ANNUALIZED
                                 TOTAL RETURN

INDEX                     1 YR.     3 YR.      5 YR.

Dow Jones Industrial       0.8%      14.3%      21.4%
Russell 2000               9.0       11.8       15.3
Wilshire 5000              2.6       18.6       21.4

U.S. Stock Funds