Dian's Column
Dian's Archive


Fund's Performance In 03: 2003 A Great Year For Equity Funds

Even though New York's Attorney General Eliot Spitzer's fund industry allegations of late trading and market timing got plenty of ink, (and resulted in some families being fined and possibly spurring new legislation) what's really foremost on investors' minds is how much money their investments have made them. And to that end, unlike Sptizer, equity fund investors had very little to grouse about in 2003.

Look through the 15 different types of funds that fall under Lipper's U.S. Diversified Equity Fund heading and it was small-cap growth funds and small-cap core funds that lead the way---the average fund under each heading up over 44 percent for the year. The top performing small-cap growth fund was the Oberweis: Micro-Cap fund, ahead almost 109 percent for the year. The top-performing small-cap core fund, Apex Mid-Cap Growth fund, up 165 percent.

The only category here suffering a performance loss was specialty diversified equity funds. The average fund in that group, which includes bear-market funds, was down over 6 percent in 2003.

Under the Sector Equity Fund heading, science and technology funds where the big winners. The average fund in it had a total return of 55.74 percent. The top-performing fund was the ProFunds: Semiconductor fund, up 146.56 percent for the year; the worst performing science and technology fund, the Jundt Science & Technology fund, up 24.84 percent.

Twelve various types of fund categories fall under the World Equity Fund heading and includes everything from gold-orientated funds to Latin American ones. Here it was China Region funds that lead the pack with the average fund in this group up over 63 percent. And, both the top and the trailing funds had respectable year-to-date returns. US Global: China Region Opportunity fund took top honors; its total return was 81.13 percent. The trailing fund, iShares Hong Kong, with a total year in 2003 of plus 36.62 percent.

Add the U.S. Diversified funds together with the Sector Equity funds and World Equity fund headings and you'll find a total of 9,642 different equity funds in Lipper's universe. The average annual total return on them--a positive 34.72 percent.

Look at the Mixed Equity Fund heading and you'll find six different fund types, 1,308 funds with a 2003 average annual total return on them of 19.73. The two fund types with the highest total returns; global flexible portfolio funds, up on average 26.9 percent and convertible securities funds, up 26.7 percent.

If my eyes haven't deceived me, it looks as though the Apex Mid-Cap growth fund made the biggest strides in '03 with a total return of 165.28 and the Rydex Dynamic: Venture 100 fund the worst, down 62.92 percent.

Within the largest 25 equity funds around are five names worth noting. Three of them had total returns of 40 percent or more: The Fidelity Low-Priced Stock fund, up 40.85 percent; the Fidelity Growth fund, up 41.36 percent; and the Nasdaq-100 Trust, up 49.12 percent for the year.

The other two funds, PIMCO-Total Return and the Vanguard GNMA, both had single-digit returns in 2003 of 5.57 percent and 2.49 percent respectively.

With the average stock fund up nearly 35 percent in 2003, a continued hot-streak in '04 could clean up the mess the bear market made during its three-year romp on Wall Street in no time at all. But, that kind of thinking would be too optimistic. After all, trees don't grow to the sky.

Equity fund investors this year, might be wise to go back to more conventional expectations. You know, those that say if you wind up with any kind of double-digit return consider yourself lucky. To keep your personal forecasting on track, according to Ibbotson, the Chicago-based securities research firm, returns on stocks from the beginning of 1926 through the end of Nov. 2003, were 10.4 percent; returns on bonds over that same time period, 5.4 percent; and on cash, 3.8 percent.

To read more articles, please visit the column archive.

[ top ]