Mutual funds did not do so well in February. However, due to their impressive performance in January, mutual funds have notable year-to-date result, according to Business Week Online.

Domestic stock funds were rather flat, as they slipped an average of 0.46%, while large-caps were the leaders of the pack for the month, with a 0.15% increase for the month. Mid-caps had the worst returns in February, as they fell 0.95%.

On the brighter side, January had extraordinary returns, with the average domestic equity fund rising 4.27% in value and small-cap growth funds climbing 7.78%.

However, Standard and Poor's believes that February's performance is nothing to worry about. In fact it is rather common for U.S. stocks to perform poorly in February, noted the S&P Chief Investment Strategist Sam Stovall.

Small-caps, meanwhile, are slowing down, and John Augustine, chief investment strategist at Fifth Third Asset Management, said it will be no surprise to him if large-caps outperform small-caps in 2006, considering they beat them in 2005.

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