Who Can Buy It?

We automatically exclude funds with high minimum initial investments (anything over $10,000) and funds that are not available in all 50 states. This eliminates some excellent funds, but we want the Rukeyser 100 to appeal to a wide swath of our readers and, for many, higher minimums just aren’t practical. As such, we also exclude single-state municipal-bond funds, which are practical only for residents of those states.

No or Low Sales Load

We consider only no-load and low-load funds (less than 3 percent) for The Rukeyser 100. Such funds put more of your money to work right away. (We continue to profile the best load funds on the other pages of the newsletter, as many readers prefer to invest through a broker or financial planner). No-load funds have dominated the list in recent years; there are very few low-load funds these days–only about 120 of the nearly 6,900 mutual funds out there–and even fewer boast particularly strong records.

Performance

Funds in the Rukeyser 100 are ranked by three-year-annualized return. Three years is a sufficiently long period to judge whether a fund can outperform its peers on a consistent basis. This is our only performance consideration, and it can be unforgiving. Funds with solid longer-term records that have encountered a bit of turbulence may find themselves excluded from the list because their three-year returns simply aren’t high enough to make the cut; in some instances, a single month of underperformance is enough to knock them off.

Note that when a fund falls off the list, it doesn’t necessarily mean its performance has been poor, just that it wasn’t among the very best performers in its group over the past three years. Many such funds remain worthwhile holdings.

One handy tool for gauging a fund’s long-term performance is the “Months On” column, which tracks the number of times the fund has appeared on the list in the past three years.

Consistent performers typically command a higher number of appearances. Funds that have made the list at least 29 of the past 36 months (more than 80 percent of the time) qualify for the Rukeyser Honor Roll, an accolade denoted by green print and laurel wreaths. This month’s honorees are shown in the table on this page.

Managers

Just as we favor funds with superior long-term track records, we also require a long-tenured manager. Only funds whose managers have been at the helm for at least three years are eligible for The Rukeyser 100. We will, however, make exceptions for managers who have run funds with similar mandates or investment styles in the past.

Missing Something?

We try to make The Rukeyser 100 simple, transparent and as unbiased as possible, but it’s not infallible. Because we consider only three-year-annualized return, funds that have experienced a bout of underperformance but whose prospects are looking up aren’t included on the list.

For example, some of the best large-cap value funds, which we think are poised for a comeback given their strong growth potential and attractive valuations, haven’t appeared on the list recently. This is why we advise readers to use The Rukeyser 100 as a starting point for further research, not as a shopping list of recommended funds. And be sure to check out the rest of the newsletter each month for information on several other potentially profitable funds to consider.