The numbers are in. Good news, everyone's a genius again. A year after the market hit bottom, you wouldn't know there was a recent recession judging from the performance of mutual funds.

On Wall Street looked at U.S. mutual fund performance over the past year ending March 31, 2010 and it was stellar. We picked five broad categories-U.S. diversified stocks, world stocks, taxable bonds, non-taxable bonds and sector funds-and asked fund tracker Lipper to rank them. The leaders turned in gains ranging from 49.4% for the non-taxable bonds category-a blistering performance for a portfolio of municipal bonds-to 177.2% for the best sector fund, staggering for any investment.

The results were this good because this specific period-almost to the day-captures the 12 months after the nastiest stock crash in recent memory. In other words, this kind up of upswing isn't likely to happen again for a long time, if ever. "The idea that we'd repeat 177% returns is just not possible," says Tom Roseen, research manager at Lipper.

Okay, now on to the fun, if just this once. First, although the outsize gains may appear unusual, Roseen says the winners make sense in hindsight. "The riskiest stuff did the best," he notes. Although from very different asset classes, each portfolio is either in a risky asset class or managed in an aggressive style. So while they lost major ground in the crash, they also had the most upside potential in the recovery. "The winners were what we might expect in a nascent market recovery," he adds.

The top sector fund-Fidelity's Select Automotive Fund-falls into Lipper's consumer services category, which tends to recover early in the economic cycle. The overall category notched gains of 11.3% in the first quarter.

And recent macro data paints a similarly bright picture. In March, U.S. employment increased 162,000 and manufacturing climbed to a level considered to be very expansionary. Sales, personal consumption and durable goods orders also all increased recently, all of which bodes well for equities.

And the bond market is perking up as well. As the economy started to pick up the pace, bond investors began to show an appetite for risk. In the first quarter, high-yield funds soared, like the chart-topping John Hancock High Yield, which posted gains of 112%. "High-yield funds were posting equity like returns-in some cases, better than equity-because people were going after yield and price gains," Roseen said.

Even the fund managers were a little surprised how good they were. "We're not used to seeing triple-digit returns," says Scott Barbee, manager for over 12 years of the Aegis Value Fund, a deep value fund that plies the waters of micro- and small-cap stocks. "It's more of a stable strategy, like watching paint dry. We're focusing on buying things when they're out of favor and holding them until a better time."

As much as the crash in 2007 and 2008 hurt all parts of the market, it decimated Barbee's. And, it wasn't because of the stocks themselves, but the behavior of Barbee's fellow investors, some of whom were hedge funds. Indeed, the market for micro- and small-cap stocks with low price-to-book-value ratios was the playground for hedge funds and proprietary trading desks of the big banks. When the financial meltdown seized up their credit and forced many out of business, it triggered a tidal wave of forced selling. The deepest value stocks plunged the farthest. As a result, the Aegis Value Fund was one of the worst performers in 2008, down 51.5%. But Barbee stuck to his guns and stayed fully invested. That helped send the fund to huge gains when the market resumed its climb.

A big hit was Dana Holdings, a maker of chassis for trucks. It was caught up in the automotive decline, and a victim of panic selling. The price dropped to 20 cents per share, with 100 million shares outstanding, a cost of $20 million for the whole company. It was a valuation Barbee calls "goofy" given that the company had $400 million in cash on the books. Further, it had operating cash flow generation of another $400 million. In the recovery, it went from 20 cents to $12 per share.

Elsewhere in the automotive industry, the story was similar. As investors feared widespread bankruptcy for the industry at the start of 2009, stock prices fell. But the bankruptcies of General Motors and Chrysler worked out smoother than markets had expected, with less disruption to the supply chain. Meanwhile, leading economic indicators ramped up, encouraging auto makers to increase production and replenish inventories. Further, the auto makers and many parts suppliers were in good shape because they had cut costs in the first half of the year. In other words, Armageddon never materialized (thanks in large part to Uncle Sam).