Bear Market All-Stars

To find the most resilient funds, we decided to look back at funds' performance during the bear market that roiled the markets from 2000 through 2002. We required that the funds in our screen each rank in the top third of their respective categories for each calendar year during that period, as well as during 2008's market freefall. To make sure the current manager was also at the helm in 2000, we screened for manager tenures of at least nine years. In addition, we made sure that funds are open to new investment at a reasonable price (below-average expense ratios). Lastly, we limited the search to those funds with investment minimums of $10,000 or less.

On March 11, 2008, the Morningstar  Premium Fund Screener pulled these funds:

 American Century Strategic Allocation: Aggressive
 American Funds Amcap
 American Funds Growth Fund of America
 Chase Growth
 Dreyfus Appreciation
 Dreyfus Premier Tax-Managed Growth
 FAM Equity-Income
 FMI Common Stock
 Franklin Rising Dividends
 GE Premier Growth Equity
 Kalmar Growth-with-Value Small Cap
 Meridian Growth
 Sentinel Capital Growth
 T. Rowe Price Mid-Cap Growth
 T. Rowe Price Personal Strategy Growth
 Value Line Emerging Opportunities

Many of these funds have held up well during tougher times by looking for companies that have strong prospects no matter what the economic weather may bring. At Kalmar Growth-with-Value Small Cap , for example, manager Ford Draper Jr.'s success has come from bucking small-growth trends, most notably tech stocks in the late 1990s. While other managers were scooping up startup tech firms, they did not meet Draper Jr.'s criteria. True, he also looks for firms with high growth rates, but demonstrated earnings growth is a must. Side-stepping these types of startup firms meant bad showings relative to peers after the fund's 1997 launch. But when the tech bubble burst and the bear market began, his strategy shined as investors flocked to stocks with meaningful earnings. Draper's savvy stock-picking and patience has also made it a standout in traditional growth rallies, as shown by its peer-beating returns in 2003 and 2007.

As far as large-cap growth managers go, Elizabeth Bramwell did a better job preserving investor capital during the bear market than most in that category. She runs Sentinel Capital Growth using a combination of macroeconomic calls and cherry-picking her favorite stocks. Because she prefers large-cap firms with stable earnings over pricier fare, it's not surprising that the fund lagged most large-growth peers during 2003's bull market. Yet, her thematic approach helped the fund shine in 2007. Stock picks that revolved around her beliefs that emerging-markets countries' demand for raw materials would stay strong and companies with significant overseas exposure would continue benefiting from a weakening dollar helped the fund to a solid 16% finish.

There are a handful of other funds on the list that also had a tough go during go-go growth rallies. Dreyfus Premier Tax-Managed Growth , Franklin Rising Dividends , and GE Premier Growth Equity have posted below-average returns for the three- and five-year periods, in part because they all posted bottom-quartile returns in 2003. Thus, each sports a Morningstar rating of 2 or 3 stars. All three have done well from an absolute-return standpoint, however.

Morningstar.com Premium Members can run this screen themselves by  clicking here. Not a Premium Member? You can still run this screen by taking a free, 14-day Premium Membership trial. (Note that the results may change as funds come in or drop out of the screen over time.)