"Up" is Down, and Down Up in October Fund Performance

November 4, 2002 (PLANSPONSOR.com) - Stock funds, like major US stock indices overall, staged a comeback in October - but still have a way to go to erase 2002's red ink.

Diversified stock funds, which comprise about three-fourths of stock fund assets, rose an average 5.9% last month, trimming their year-to-date declines to about 22.5%, according to preliminary data from Lipper.

Fall Figures

In October the Dow rose 10.6%, its second-best October on record, while the NASDAQ gained 13.45%, the S&P 500 rose 8.64%, the Wilshire 5000 was 7.51% higher at month’s end, and the Russell 2000 closed 3.10% higher.   However, year-to-date the Dow is still down 16.21%, while the Wilshire 5000 is off 21.95%, the S&P 500 is down 22.85%, the Russell 2000 is 23.54% lower – and the NASDAQ has shed 31.82% since the beginning of the year. .

Large-cap core funds, which invest in all types of large company stocks and are among the most widely held funds in retirement plan portfolios, rose 8%, but are still down 22.7% year-to-date.   In fact, the only type of diversified stock fund that is up year-to-date according to the report is specialty diversified equity funds, which include funds that bet against a market rise.   Those funds, which only have about $5.6 billion in combined assets, are up 11.3% year-to-date, but slipped 3.9% in October.

Big Movers

Among the biggest stock funds, Fidelity Magellan rose 9.44% in October, while the Vanguard 500 Index gained 8.8%.   However, Magellan is down 22.3% year-to-date, while Vanguard’s 500, which tracks the S&P 500, a popular 401(k) option, is still down 21.9% in 2002.

The best performing mutual funds in October were telecommunications funds, according to Reuters, which rose 20.2% – but are still down 43.4% on a year-to-date basis.

Next best were science and technology funds, up 16.6%, and Latin American funds, which rose 11.5%.   Still, year-to-date tech funds are off 43.2%, while Latin American funds are down 24.8 percent.

Gold funds fell 8.7% in October, but remain up 32% on the year.