Our list of changes to the Rukeyser 100 is the shortest it has been in several months, primarily due to slightly lower volatility in the markets. Our small company section churned, as investors continue to shun the fry. However, all three of the small-cap funds that fell off, Loomis Sayles Small-Cap Growth, Stratton Small-Cap Value, and Dreman Contrarian Small-Cap Value, continue to outperform in their categories and were beaten out for the places on the list by tenths of percentage points. All three remain solid small-cap plays.

The yellow metal has regained its dominance over the sector funds, making the cut. Gold prices gained 14 percent in December as currency concerns and risk aversion once again drove investors into metals. Utility funds hung on to the remaining two slots as depended dividends continued to drive their performance into the end of the year.

Despite having outperformed the majority of its peers for the past two years, Pax World H/Y has just found its way into the Rukeyser 100 now that manager Mary Austin’s tenure has reached our required minimum of three years.

Below are the top fund in five major categories, ranked according to three-year returns. We primarily consider funds with managers in place for at least three years; the only exceptions are managers with at least three years’ experience in a similar capacity. We don’t rank funds with front- or back-end loads greater than 3 percent or funds that are closed to new investors, have less than $25 million in assets, have minimums of $10,000 or more, have trust restrictions or are single-state muni-bond funds.

All data as of 12/31/08. Source: Morningstar, Bloomberg

Funds Added This Month

• Northern Small-Cap Value
• T. Rowe Price Small-Cap Value
• Westcore Select
• Sequoia
• Tocqueville Gold
• Janus Overseas
• PIA Moderate Duration Bond
• Pax World X/Y
• Payden Emerging Markets Bond
• Managers Global Bond
• AllianceBernstein National Municipal Income

Funds Dropped This Month

• Loomis Sayles Small-Cap Growth
• Stratton Small-Cap Value
• Dreman Contrarian Small-Cap Value
• Markman Core Growth I
• Rydex Utilities
• Northern International Growth Equity
• Fidelity Government Income
• WF Adv High Income
• Prudent Global Income
• PIMCO Developing Local Markets A
• PIMCO Municipal Income