(MONEY Magazine) – December isn't just the time to buy new calendars, stock up on eggnog and make resolutions sure to be broken. It's also the time to look back and evaluate the past year. So here's the second annual presentation of our mutual fund Oscars, honoring the fund industry's best and worst productions.

WORST DRAMA

In March, the directors of Navellier Aggressive Small Cap Equity fired portfolio manager Louis Navellier over their "loss of confidence" in his ability to run the fund. Navellier shot back that the directors "failed to act in the best interest of fund shareholders." A proxy battle ensued. In a thrilling climax, the shareholders sided with Navellier. With the fund up 14% in a 25% market, it's not clear whether the good guys won--but it was the sorriest soap opera of the year.

BEST ORIGINAL SCREENPLAY

USAA and State Street Research, whose new prospectuses are presented in clear, simple English and uncluttered graphics--a form of expression that until now has been almost completely alien to the mutual fund industry

WORST ORIGINAL IDEA FOR A MUTUAL FUND

Introduced in May, Pauze Tombstone is an index fund that buys companies in the "death-care sector." In plain English, that's coffins, funeral homes and cemeteries. Not only are there just nine publicly traded stocks in this industry, but the fund also charges a maximum sales load of 3.75% and knife-in-the-back expenses of up to 1.88%. That enables the fund company, Pauze Swanson of Houston, to make a killing--but you shouldn't be dying to get in.

Other notable runners-up in this category: HomeState Year 2000 Fund (with only two years left to fix this overhyped computer glitch, why invest now?), Illinois Municipal Fund (most Illinois bonds are taxable to residents of the Land of Lincoln) and Vontobel Eastern European Debt Fund (just what you've been waiting for: a chance to get your hands on some Slovenian bonds)

WORST SHORT SUBJECTS

As salaries skyrocket and performance records become portable, fund managers have turned into quick-change artists, altering their allegiance from month to month. Patrick Adams took over Berger 100 in February 1997, after just nine months running Kemper Growth. Warren Isabelle left Pioneer Capital Growth in January 1997, joined the Evergreen fund family, left a few weeks later to join the small Prospect Street firm, then quit to start his own money-management shop. Sure, it's pretty cool to watch a fund manager switch roles rapidly--as long as you don't own his old fund.

BEST BOX OFFICE MANAGEMENT

U.S. Global, for placing a 2% "trader's fee" on shares of its Regent Eastern European Fund held for less than six months, and American Century, for charging a 2% redemption fee on shares of its New Opportunities Fund held less than five years; both moves should discourage harmful short-term speculation. Likewise, kudos to Scudder, for closing its Micro Cap Fund to new investors when it reached $100 million in assets, and the firm n/i, for closing its Micro Cap and Growth portfolios to new customers; by limiting new money, these funds should cushion the performance damage caused by getting too big too fast. Even Fidelity gets a share of this award, for eliminating the 3% sales loads on Growth Company and Capital Appreciation, and for increasing the redemption fees on Export & Multinational and Small Cap Stock to beat back market timers.

WORST BOX OFFICE MANAGEMENT

Unfortunately, Fidelity gets a multibillion-dollar raspberry for closing Magellan to new investment several years later than it should have and then for not routinely warning callers that it would be using "fair value pricing" (rather than market prices) to determine the cost of fund shares during the nearly 20% Hong Kong market crash in late October.

BEST DIRECTION

In a boffo development, CGM, Strong, Yacktman and other companies began opening "focused" or concentrated funds that hold 50 or fewer stocks. By putting all their assets into a handful of the managers' favorite stocks, such funds offer a valuable complement to broad index funds (for more on concentrated portfolios, see "Six Funds That Win with a Few Great Picks" on page 54).