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.