If the performance of your stock mutual fund disappointed you last year, you’re not alone — virtually everyone holding a stock mutual fund felt the sting of a faltering stock market. Weiss Ratings Inc., an independent provider of ratings and analyses of financial services companies, mutual funds and stocks, reports that 2002 was the third straight year that stock mutual funds took it on the chin.
Here are some of the highlights, or lowlights, of the research.
- Despite a fourth-quarter upswing in the stock market, 90 percent of stock mutual funds reported negative returns in 2002.
- Technology funds registered the worst performance for a third straight year, with 99.3 percent reporting negative returns.
- Although the tech sector improved during the fourth quarter of 2002, posting a 16.9 percent return, investors still lost 40 percent on technology funds last year.
- Precious metals and real estate-related funds were the only sectors to post positive returns in 2002.
- In contrast to stock funds, 94 percent of bond mutual funds delivered positive returns to investors in 2002, for an average gain on all bond funds of 6.4 percent.
Says David Lackey, president of Weiss Ratings, “These results should serve as a stark reminder that mutual fund investing, despite the added diversification, does not protect investors from the ups and downs in the stock market.” Source: Weiss Ratings Inc., www.WeissRatings.com
