For the second straight year, stock funds posted negative returns, with 83% of U.S. stock fund posting an average return of -12.5% last year, according to Weiss Ratings, Inc. That was worse than 2000, when 63% of equity funds posted negative returns, losing an overall average of 4.45%.

Specialized and sector funds performed the worst out of any other categories, said Martin Weiss, chairman of Weiss Ratings. Indeed, 100% of the 89 utility funds tracked by Weiss had an average –21.3% return. Technology funds didn’t fare much better, with 274 out of 278, or 99%, reporting an average return of -36.11%. Aggressive growth funds were the third worst sector, with 243 out 265 funds reporting an average return of –23.26%

"These results confirm that even professional mutual fund managers can’t protect investors from losses in a broad market decline," Weiss said, in a statement.

The bottom three funds for 2001 included ProFunds’ Internet UltraSector Services Fund, which returned –76.94% for the year. It was followed by the Berkshire Focus Fund and the Berkshire Technology Fund which posted one-year returns of –72.17% and –71.68%, respectively.

On the flip side, 95% of bond funds posted an average return of 4.86% in 2001, down from 2000’s average of 7.68%. The best performing bond funds out of the 4,235 tracked by Weiss included the Pimco Emerging Markets Bond Administration Fund, the Pioneer High Yield Fund and the TCW Galileo Emerging Market Income Fund, which posted one-year returns of 27.83%, 16.74% and 16.24%, respectively.

The only equity fund categories tracked by Weiss that managed to perform well last year include precious metal funds, which had an average one-year return of 19.3% and real estate with 8.95%.

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