Maybe the stock and bond market's recent inflation fears are warranted, a study by CDA/Wiesenberger concludes.
The study showed in the worst inflationary period in recent times - between 1977 and 1980 - the 10 top-performing mutual fund categories were the same as the top 10 this year.
Not surprisingly, the funds that led the pack in the earlier period (when the Consumer Price Index rose 10.34% per year), were gold and precious metals funds. They posted average returns of nearly 58% annually. For the year through May 31, gold and precious metals funds were again on top, with 31.25%.
``We looked back at the past 10 years and no other one-year calendar period came close to having such an eerie similarity to this list,'' the report said.
Among the similarities:
- Emerging and natural resources, ranked second this year, was fourth in the 1977-1980 period.
- Small-cap growth was third this year and in the earlier period.
- ``Maximum capital appreciation'' fourth this year, was second in the earlier period.
Technology, long-term growth and the S&P 500 index ranked fifth, sixth and ninth, respectively, in both periods.