Investing May 8, 2003

Weiss: Stock Funds End First Quarter Down

May 8, 2003 (PLANSPONSOR.com) - Only three stock mutual fund sectors managed to eke out gains in the first quarter of 2003, as the vast majority reported negative returns to start off the year.
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Almost nine out of 10 (88.4%) of the 8,300 stock mutual funds covered by Weiss Ratings, Inc suffered losses in the quarter,resulting in an average first-quarter loss of 3.66% for all stock funds.   In fact, the only fund sectors to post positive returns for the quarter were health-related funds, funds invested in convertible securities, and real estate-related funds, which registered modest returns of 0.96%, 1.81%, and 1.33%, respectively, according to data by Weiss.

Perhaps most surprising among the losses was precious metals, with all of the mutual fund industry’s precious metals funds posting negative returns for the first quarter of 2003.   Overall, this sector lost an average of 11.62% during the first three months of 2003, compared to an average gain of 35.92% for the same period in 2002.

“This is a good example of the risks of chasing the hottest sector,” warned David Lackey, president of Weiss Ratings, in a statement.

Winners and Losers

Investors continued to find safety in bonds, with 97.9% of bond mutual funds reporting positive returns in the first quarter, for an average gain of 1.42% on all bond funds. Of the 4,348 bond mutual funds reviewed by Weiss, those recording the largest returns during the first three months of 2003 include:

  • Fidelity Hi Income Advantage (10.78%)
  • PIMCO Emerging Markets Bond (10.47%)
  • Alliance Emerging Market Debt (10.40%)
  • SEI Intl Emerging Markets Debt (9.79%)
  • TCW Galileo Emerging Market Income (8.44%)

On the other end, most stock funds finished the quarter in the red.   Those recording the largest losses for the first quarter include:

  • Perkins Opportunity Fund (-29.88%)
  • ProFunds-Telecom UltraSector Aggressive Growth (-23.58%)
  • Frontier Fund-Equity (-19.23%)
  • Matthews Korea Fund (-19.03%)
  • Touchstone International Equity Fund (-15.80%)

Conversely, the largest gains during the period were seen in:

  • Amerindo Technology (24.43%)
  • Royce Trust & GiftShares (24.31%)
  • Polynous Growth Fund (21.27%)
  • ProFunds-Internet UltraSector Aggressive (14.16%)
  • Apex Mid-Cap Growth Fund (13.89%).

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