Mutual Fund Returns Struggle in 2001

July 30, 2001 ( - The first half of 2001 has been hard on equity mutual fund investors, with only 23% of the asset class reporting positive results, according to rating and analysis provider Weiss Ratings, Inc.

First quarter rate cuts by the Federal Reserve failed to buoy the markets early in the year and equity mutual funds slipped by 12% over the three-month period. However, April’s rally helped to cancel out some of those losses, the funds gaining 6.3% in the second quarter of 2001.

Overall, the 6,919 equity mutual funds studied by Wiess Ratings fell by 6.9% on average in the first half of the year.

Tech, Growth, Foreign

Not surprisingly the worst returns came from the technology sector. Of 200 technology funds, only 4% managed positive returns, leading to an average 24.6% decline across funds in this sector.

Aggressive growth funds also performed poorly, returning minus 13.5% on average. Of the 224 funds in this sector, only 30, or 13% reported positive returns.

Performance by foreign sector funds was also dismal, the funds falling by 12.6% on average following increased concerns on debt levels in Argentina, the liquidity crisis in Turkey and continuing political upheaval in Indonesia and the Philippines.

Some Numbers are Up

Nevertheless, a handful of funds within these sectors did manage stellar returns, over the period. CMG Focus Fund, an aggressive growth fund, for instance, increased by 26%.

Of the equity funds studied by Weiss Ratings, the top performers over the first half of 2001 were:

  • Pilgrims Precious Metals A, which increased by 55.2%
  • Matthews China Funds, a foreign fund which was up by 43.1%, and
  • Boston Ptrs Small Cap Value II, up by 40.2%

Bond funds didn?t do all that much better. The average return for bond mutual funds dropped to 0.23% in the second quarter, down from 2.21% over the previous quarter. Overall, bond mutual funds returned 2.33% for the six-month period.