The lion's share of stock mutual funds, 90%, posted negative returns in 2002, according to Weiss Ratings. Precious metals and real estate were the only two sectors that gained last year.
Investors' lack of confidence comes as no surprise given the widespread inability of stock mutual funds to pull out of the red, despite a fourth-quarter upturn in the stock market. With the market sinking for the third year in a row, "even some of the best fund managers are taking it on the chin," said David Lackey, president of Weiss.
Technology funds remained in last place, with 99.3% of these funds losing money in 2002. Even though technology stocks improved at the end of the year, investors still lost a greater percentage of value in 2002, 40.3%, over the two previous years, when they respectively sank 35.6% and 29%.
Three ProFunds - Wireless, Semiconductors and Ultra OTC - fared the worst overall, with respective losses of 80.5%, 70.4%, and 69.7%. Rydex Funds came in a close fourth with its Dynamic Velocity fund, which returned minus 68.5%. The fifth-worst performer, the only actively managed fund, was the Van Wagoner Post Venture fund, which returned negative 67.3%.
The top five performing funds were all in the precious metals sector, ranging between a high of 107% to 82.9%.
Unsurprisingly, most bond funds, 94%, continued to post gains in 2002, averaging 6.36%. As a category, bond funds improved in performance over last year's gains of 4.65%. The top five bond funds were run by American Century and Delaware Investments.