Over the past three years, investing in natural resources, metals or emerging markets has been a ticket to disappointment.

Of the 20 funds with the worst total returns over three years, seven have been in natural resources, three in metals and three were broad emerging markets (specific areas such as Russia, Greece and Chile accounted for the rest.)

See our slideshow on the best funds over the past three years

But years of losses can be seen as a glass half-full. Are these funds the new buying opportunity?

Clients should not have a knee-jerk reaction to sell, but rather take the time to understand why the investments performed so badly, says Alex Bryan, equity strategies analyst at Morningstar. If the fundamentals have weakened (as they have in the gold mining industry in recent years, he says), that can signal a sell situation. But if the fundamentals have not deteriorated, clients should take a long-term view and decide if the investment still fits their portfolio needs. He notes that some of these loser funds are a niche play (such as a Russia or Chile ETF) that may still perform the diversification role initially intended.

Moreover, for investors who have not been there for the losses, this can be a buying opportunity, especially if they use a dollar-cost averaging strategy, he says.

Lipper's head of research services, Tom Roseen, cautions that any sell decision should be made dispassionately. Often, investors are reluctant to admit they made a bad decision and hold on to an investment even when it no longer meets our investment needs, he says.

Click through to see all 20 funds or view them as a slideshow. All data is from Morningstar. 

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