A not-so-memorable year, except for CGM Focus. By Andrew Tanzer, Senior Associate Editor April 3, 2008 Few fund managers covered themselves in glory over the past 12 months -- the markets just didn't cooperate. Standard & Poor's 500-stock index sank 5% (including dividends) over the year to March 10, the Russell 2000 shed 14%, and the MSCI EAFE index, which tracks foreign stocks, lost less than 1%.The 16 domestic stock funds we recommend in the Kiplinger 25 did better on average, losing just 1%. But the figure is distorted by a statistical outlier: the towering 66% return of Ken Heebner's CGM Focus. Perhaps a fairer measure is median return; by that yardstick, the average domestic fund declined nearly 3%. Our foreign fund picks fared better, up 6% on average. But here again the result was pulled up by one stellar performer, T. Rowe Price Emerging Markets Stock, which returned 35%. The average bond fund returned 4%, yet again demonstrating bonds' value in tempering the ups and, particularly, the downs of a portfolio. All three of our recommended portfolios held up pretty well. The long-term portfolio, aided by a large weighting in growth-stock funds and a small but lucrative position in emerging markets, returned 2%. Both the medium-term and short-term portfolios were flat for the year, helped by holdings in bond funds. Advertisement We bid au revoir to seven of the funds that appeared in last year's Kiplinger 25. Excelsior Value & Restructuring, a consistently excellent performer, began levying sales charges after the acquisition of its adviser by Bank of America. Champlain Small Company, also an outstanding fund, shut its doors to new investors. We believe that Dodge & Cox Stock and Baron Small Cap are worthy replacements. Oakmark Select I and Muhlenkamp continued to struggle. We've deleted them and believe we upgraded the portfolio by switching to Longleaf Partners and Kinetics Paradigm. We've also dropped Oakmark International, in part because it's lagged lately but also to add a fund that focuses on fast-growing foreign companies, a hole we plugged with Marsico Global. Merger fund faces head winds because of the collapse of the takeover market. We've dropped Merger and instead introduced our first commodities fund, Pimco CommodityRealReturn, which, like Merger, doesn't move in sync with stock funds. Abnormally volatile credit markets explain why we dropped Fidelity Floating Rate High Income (see Great Income, With a Catch). We've added our first TIPS fund, Vanguard Inflation-Protected Securities, for investors who worry about inflation sapping the purchasing power of bond holdings over the long term.