A Year of Investing Extremes

It wasn’t hard to make money in 2013, just as long as you were invested in U.S. stocks. Nine of every 10 stocks in the S&P 500 are set to end the year in positive territory.

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Yet many other asset classes suffered. Just two in five U.S. bond funds broke even for investors. Emerging market equities still haven’t recovered from a rough summer, and almost anything associated with gold lost money.

As the new year approaches, Bloomberg tallied the biggest winners and losers so far, from stocks and mutual funds to master-limited partnerships and IPOs.

(Data compiled by Bloomberg from Dec. 31, 2012, to Dec. 2, 2013. Where applicable, assets were compared based on total return, which includes both price changes and dividend yields.)

Best U.S. Large-Cap Stock

Fannie Mae

+1,010%

American taxpayers won big when shares of Fannie Mae (FNMA) increased tenfold in 2013. In 2008, the mortgage financier, which along with Freddie Mac buys up two-thirds of all new home loans, lost 98 percent of its equity value and was bailed out by the U.S. government. The U.S. still owns almost 80 percent of the company, and Congress, the White House and activist investors like Bill Ackman are full of competing ideas for its future. It’s a “dynamic situation where the opportunity for profit is to make multiples of your money,” said Ackman, whose Pershing Square owns 2 percent of Fannie.

Of 458 stocks on U.S. exchanges with market capitalizations of more than $10 billion.

Worst U.S. Large-Cap Stock

Newmont Mining

-47.2%

In 2013, owning a stake in a gold mine was not the way to make money. Newmont Mining (NEM), the second-largest gold producer in the world, tried to boost profit margins by eliminating 30 percent of its corporate office staff. It wasn’t enough to make up for a 31 percent drop in the price of gold since October 2012.

Of 458 stocks on U.S. exchanges with market capitalizations of more than $10 billion.

Best International Stock

Chongqing Changan Automobile Co.

+280.5%

Sales of automobiles are surging in China, and car makers are building factories to meet the demand. Ford Motor Co.’s main partner in China is Chongqing Changan Automobile Co. (000625). Together, they operate two plants in the southwestern city of Chongqing and are building two more. Changan’s sales last quarter were up 33 percent from a year earlier, and its adjusted earnings per share rose 400 percent.

Of non-U.S. companies in the 2,883-stock FTSE All World Index, which includes developed and emerging markets.

Worst International Stock

MMX Mineracao e Metalicos SA

-85.4%

Eike Batista, once Brazil’s richest man, saw his fortune decimated in 2013. OGX, his oil company, filed for bankruptcy protection on Oct. 30. Other parts of his empire felt the aftereffects. The mining company he founded, MMX Mineracao & Metalicos SA (MMXM3), has been selling off assets to pay down debt. MMX’s sales were up 38 percent last quarter, but losses at the iron ore miner have gotten worse.

Of non-U.S. companies in the 2,883-stock FTSE All World Index, which includes developed and emerging markets.

Best Equity Mutual Fund

Fidelity Select Biotechnology Portfolio

+64.0%

FBIOX has stakes in 133 biotech companies. Its largest holding is Gilead Sciences (GILD), which doubled in the first 11 months of the year as it reported successful trials of new drugs and increased sales. One force driving biotech stocks, according to Bloomberg Industries, is acquisition activity by pharmaceutical companies eager for new drug pipelines. Analysts estimate mature U.S. biotech companies will boost sales 18 percent and earnings 25 percent in 2014.

Of 1,392 U.S.-based equity mutual funds with assets of $500 million or more. Excluded are closed-end funds and those that rely on leverage.

Worst Equity Mutual Fund

Fidelity Advisor Gold Fund

-49.1%

While stocks in almost every industry prospered, gold miners were left way behind. Fidelity Advisor Gold Fund (FGDAX) owns 112 mining companies from around the world. All its top holdings lost investors money, and the portfolio’s value dropped almost twice as fast as the price of gold.

Of 1,392 open-ended, non-leveraged U.S.-based equity mutual funds with assets of $500 million or more. Excluded are closed-end funds and those that rely on leverage.

Best Small-Cap Stock Fund

Lord Abbett Micro-Cap Growth Fund

+71.6%

It was yet another fantastic year for small companies, with the Russell 2000 small-cap index up 170 percent since March 2009. Outperformance by smaller companies, which depend more on U.S. growth, is often a sign the economy is gaining speed. Lord Abbett Micro-Cap Growth Fund (LMIYX) did the best among such funds by focusing on the smallest of the small. Its top holding is Xoom Corp. (XOOM), a company that allows consumers to send money across international borders. Xoom, which has 160 employees, went public in February and its stock has returned 67 percent since then.

Of 327 U.S.-based small-cap equity mutual funds with assets of at least $100 million and a median holding market capitalization of less than $3 billion. Excluded are closed-end funds and those that rely on leverage.

Worst Small-Cap Stock Fund

Wasatch Emerging Markets Small Cap Fund

-1.4%

While small-cap stocks did well in 2013, it was a mediocre year for emerging market equities. Wasatch Emerging Markets Small Cap Fund (WAEMX) was caught between these trends. It did manage to beat the FTSE Emerging Index, which dropped 5 percent in the first 11 months of the year. The fund’s largest holding is St. Shine Optical Co. (1565 TT), a Taiwanese maker of soft contact lens that has seen its shares double in the past year.

Best Bond Fund

Lord Abbett Convertible Fund

+23.4%

The top-performing bond fund’s key advantage this year was its equity-like characteristics. Lord Abbett Convertible Fund (LACFX) invests in convertible securities, which are bonds that can be swapped at certain times for company stock. The fund’s top two holdings are Gilead Sciences and Priceline.com (PCLN). Overall, regular bonds had a disappointing year. The broad Barclays Aggregate Bond Index delivered a negative return of 1.7 percent.

Of 747 open-ended fixed income mutual funds based in the U.S. with assets of $500 million or more.

Worst Bond Fund

Vanguard Extended Duration Treasury Index Fund

-19.3%

VEDTX invests in U.S. Treasury-issued bonds that don’t mature for 20 to 30 years. That means they’re especially vulnerable to the worries about rising interest rates that cropped up in 2013. At times of heightened risk, by contrast, such Treasuries are an investor favorite. The fund returned more than 55 percent in both 2008 and 2011.

Of 747 open-ended fixed income mutual funds based in the U.S. with assets of $500 million or more.

Best Commodity

Natural Gas (NYMEX Natural Gas)

+18.1%

Natural gas was bound to turn around eventually. After new drilling techniques led to a boost in production, natural gas prices had dropped by half since 2008. That slide halted in 2013, and on Dec. 3 government data showed that hedge funds had increased their bets on gas amid forecasts of colder weather for the U.S.

Of 18 global commodities tracked by Bloomberg

Worst Commodity

Corn (CBOT Corn)

-41.2%

A record harvest from U.S. farmers was only one of the factors pushing down corn prices this year. In November, officials in China began blocking some shipments of U.S. corn, citing a genetically modified variety that had not been approved.

Of 18 global commodities tracked by Bloomberg

Best Exchange-Traded Fund

Guggenheim Solar ETF

+144.8%

Sporting the ticker TAN, Guggenheim Solar ETF invests in 27 solar power companies from the U.S., China and elsewhere. Solar stocks crashed in 2011 when oversupply led to a 52 percent drop in solar panel prices. Prices fell further in 2012 but rebounded this year as the supply glut diminished. That reversal helped triple the Bloomberg Solar Global Large Solar Energy Index, an index of solar manufacturers that had at one point lost 87 percent of its value.

Of 1,141 U.S.-based exchange-traded funds. Excluded are exchange-traded notes and ETFs that use leverage.

Worst Exchange-Traded Fund

ProShares VIX Short-Term Futures ETF

-63.9%

VIXY is designed to profit from market mayhem. That makes it a terrible strategy in an exceptionally calm year for markets. The ETF invests in instruments tied to the CBOE Volatility Index, or VIX, which is often called the “fear gauge” of the U.S. stock market. The VIX hit a five-year low in January and stayed there for most of the year as worries about economic strength in the U.S. receded, according to Bloomberg Industries. And, because VIXY invests in futures contracts that erode in value over time, the fund actually did much worse than the VIX.

Of 1,141 U.S.-based exchange-traded funds. Excluded are exchange-traded notes and ETFs that use leverage.

Best Master-Limited Partnership

Icahn Enterprises L.P.

+193.8%

Activist investor Carl Icahn isn’t widely known for his involvement in master-limited partnerships, but Icahn Enterprises (IEP) makes up about half of his net worth, according to the Bloomberg Billionaires Index. MLPs are a kind of publicly traded stock that provide tax benefits and generous dividends. They’re restricted to companies primarily in the natural resources, commodity and real estate industries. Icahn’s firm qualifies, with a diverse group of holdings that include energy and metals companies along with rail cars, food packaging and home fashion companies.

Of 108 master-limited partnerships listed on U.S. exchanges with market capitalizations of $500 million or more.

Worst Master-Limited Partnership

Rentech Nitrogen Partners LP

-45.1%

Rentech Nitrogen Partners LP (RNF) was among the best-performing MLPs in 2012, with a return of 154 percent. This year, shares in the nitrogen fertilizer company tanked, along with the market prices of its fertilizer products. The company reported its first quarterly loss on Nov. 7. Analysts surveyed by Bloomberg expect profits to return next year.

Of 108 master-limited partnerships listed on U.S. exchanges with market capitalizations of $500 million or more.

Best U.S. Initial Public Offering

Aratana Therapeutics Inc.

+175.9%

Chief Executive Officer Steven St. Peter’s goal for Aratana Therapeutics Inc. (PETX) is to be “the premier pet therapeutics company.” Aratana, which went public June 26 and has no revenue yet, is developing several drugs for dogs and cats. In November, the company reported promising results for a drug that alleviates pain in dogs with osteoarthritis.

More than $77 billion in IPOs have been announced in 2013, including Twitter’s Nov. 6 offering, making it the busiest year since at least 2010.

Of 163 U.S. IPOs in 2013 with a market capitalization of at least $250 million, measured from opening price.

Worst U.S. Initial Public Offering

Tremor Video

-60.6%

Shares of Tremor Video (TRMR) dropped by half on Nov. 8 after the company’s third quarter report spooked investors. A provider of technology for online video advertising, Tremor said fourth-quarter sales would be lower than expected. Executives blamed the decline in the forecast on shifting dynamics in the ad industry. An investor class-action lawsuit filed Nov. 26 alleges that Tremor should have disclosed before its June IPO that it was losing sales due to “its inferior mobile browsing capabilities.” A Tremor spokeswoman declined to comment on a pending lawsuit.

Of 163 U.S. IPOs in 2013 with a market capitalization of at least $250 million, measured from opening price.

Best Currency

Danish Krone

+2.66%

The Federal Reserve’s aggressive quantitative easing helped push the U.S. dollar lower against the euro in 2013. Denmark’s central bank has a policy of pegging the krone to the euro. So, while the euro rose 2.65% against the dollar, the krone rose 2.66%. “We’ll do whatever it takes” to defend the peg, bank Governor Lars Rohde said Dec. 2.

Of 16 major currencies tracked by Bloomberg, measured against the U.S. dollar.

Worst Currency

South African Rand

-17.5%

The Federal Reserve’s monetary efforts were rivaled in 2013 by a newly aggressive Bank of Japan. That helped push the Japanese yen 15.7 percent lower against the dollar. Only the South African rand did worse. Michael Keenan, a Barclays Plc strategist, says the rand fell because of concerns that the Fed will taper its quantitative easing soon, cutting off the flow of money into risky assets in emerging markets. Foreign investors sold $3.5 billion of South African stock and bonds in November and early December, according to JSE Ltd.