Michael L. Avery and Daniel J. Vrabac turned their Ivy Asset Strategy Fund into the top performer in its category this year by loading up on mining companies.

The managers, who can buy stocks, bonds and commodities globally, have almost a quarter of their assets in metals and mining shares. Melbourne-based BHP Billiton Ltd., the industry's largest company, and Rio de Janeiro-based Cia. Vale do Rio Doce, the world's No. 1 producer of iron ore, are among their biggest holdings.

Ivy's $218 million fund gained 24 percent in the past 12 months, outpacing all 61 so-called flexible mutual funds tracked by Bloomberg. Avery, 52, and Vrabac, 51, have focused for the past two years on companies benefiting from construction projects in China and elsewhere in Asia.

"The most rapid growth is occurring in countries such as China," Avery said from his office in Overland Park, Kan. "What's working are companies and services focused on exports or building the infrastructure of those economies."

Avery and Vrabac, who have jointly managed the Ivy fund since 1997, started investing in North American, Australian and Brazilian mining companies in mid-2003.

The American depositary shares of Vale do Rio Doce more than doubled since 2003. The Brazilian company expects China to help spur a 13 percent annual increase in demand for iron ore through 2010.

Billiton's American depositary receipts are up more than 70 percent in the past two years. Charles W. "Chip" Goodyear, the company's chief executive, said in a Sept. 30 interview that Billiton may get 20 percent of its global sales from China within five years.

Avery and Vrabac use a "big-picture thesis" to invest and get help from 28 analysts. They jointly run the Waddell & Reed Advisors Asset Strategy Fund in addition to the Ivy fund. Waddell & Reed Financial Inc. bought Ivy Funds in 2002.

Avery, who has a master's in business administration from St. Louis University, in June was named chief investment officer of Waddell & Reed, which has $38 billion under management. Vrabac has an MBA from Indiana University.

The Ivy Asset Strategy Fund climbed at an annual rate of 6.5 percent during the past five years, compared with an annual loss of 1.7 percent for the U.S. benchmark Standard & Poor's 500-stock index. The fund has about three-quarters of its assets in stocks, and the rest split among bonds, precious metals and cash.

Avery and Vrabac said they prefer companies in North America, Australia and Brazil where financial reporting is more transparent and there's easier access to company executives. After mining stocks, energy-related companies are the fund managers' favorites.

Ivy's holdings include Exxon Mobil Corp., the world's largest publicly traded oil company. The Irving, Tex.-based company reported industry-record third-quarter earnings of $9.92 billion. The Ivy fund also owns shares of The Woodlands, Tex.-based Anadarko Petroleum Corp., and Headwaters Inc. of South Jordan, Utah, a developer of coal-gasification technology and other alternative energy products.

The fund's concentration in mining and energy-related companies means it's more risky than other asset-allocation funds, said Greg Carlson, a mutual fund analyst at Morningstar Inc. in Chicago.

"Their record is good," Carlson said. "But certainly the fund does look pretty aggressively positioned."

Avery and Vrabac have no plans to back away from their strategy of betting on economic growth in Asia.

"We're trying to ride up the economic growth curve, in that as people become employed, as they have their basic needs met, as their disposable income increases, they will become consumers," Avery said. His fund owns shares of Hong Kong-based Hutchison Whampoa Ltd., the world's biggest port operator, whose chairman is billionaire Li Ka-shing. The company's other lines of business include mobile-telephone service and health and beauty stores.

The fund also has a stake in China Mobile (Hong Kong) Ltd., whose shares have climbed 33 percent this year. The country added 5 million users in September, bringing the total to 378 million, the Ministry of Information Industry said last month.

"Walk down the street anywhere in China, and the kids all have cell phones, just like here," Avery said. "The thing about China is, there are a lot of kids."