Equity Funds Scratch Out Minimal Q1 Gains

April 2, 2004 (PLANSPONSOR.com) - Equity funds could only manage minimal first quarter 2004 gains, according to final Lipper quarterly figures.

Lipper said that while the 2003 rally continued into January 2004, February and March declines still pulled down mutual fund returns for the quarter. The best-returning funds for the quarter came in traditional bear market investments, such as real estate and international stocks, according to the Lipper data.

U.S. diversified equity funds had only a meager 2.98% return, on average, for the quarter. Funds holding predominantly smaller companies fared best, with small-cap value funds turning in a 6.13% performance.

Individual sector funds fared better, posting an average 5.09% advance. Real estate funds, for example, boasted an 11.91% average return.

International funds also fared comparatively well, averaging a 5.13% return. Japanese funds had a 13.82% return in the quarter, boosted by improvements in the world’s second-largest economy. Pacific region funds reflected a 10.50% average showing.

Of the 25 largest mutual funds measured by Lipper, the international fund American Funds EuroPacific Grade A had a 6.79% return for the quarter. The worst of the top 25, the Nasdaq-100 Trust 1, suffered from an overall downturn in technology shares and posted a negative 2% return, the Lipper data showed.