Top Funds Still Carry Torch For Home Builders; Managers add to Centex positions, also favoring Pacific Sunwear, Chico's.(SERIES: FUNDS & PERSONAL FINANCE)(IBD SPECIAL REPORT)(BUYS & SELLS)

Byline: JULIE HUYNH

The nation's best-performing funds continued to tiptoe back into the market as the stock market rallied in recent months.

Top funds have been buying home-builder issues Centex and Ryland Group in the latest reporting periods. Retailers Pacific Sunwear and Chico's FAS are also among fund favorites.

IBD spotted three top-notch funds that added Centex, investing an estimated total of $27 million in their latest reporting periods. The $332 million CGM Realty Fund and $162 million Hotchkis & Wiley Small Cap Value Fund have stakes in the stock. Both funds have earned an A+ 36-Months Performance Rating from IBD.

Home builders had an impressive run from 2000 to early 2002 amid low interest rates and a booming real estate market. Since then, the group has taken a back seat as more volatile groups, such as techs and health care, have taken the lead. IBD's Building-Residential/Commercial group ranks 71 out of 197 industries.

With $9 billion in revenue, the Dallas-based Centex is the No. 1 home builder in terms of sales, followed by Pulte Homes and Lennar Group. Centex builds homes for first-time and move-up buyers. The average price of its homes is $214,000.

Its revenue is diversified across several businesses, such as home building, investment real estate, financial services, and construction services and products.