From the January 2009 issue of Research Magazine • Subscribe!

Fixed Income Rules

Many funds, fund categories and stock- market indexes have dropped by about 40 percent through December 4, 2008, according to Lipper. The Dow Jones, for instance, is down about 37 percent, while the S&P 500 is off roughly 42 percent and the NYSE some 46 percent.

On a five-year basis, these securities-market indexes have a cumulative total reinvestment performance of about negative 4 percent.

In terms of the 25 largest mutual funds, year-to-date performance in 2008 has paralleled that of the market indexes. However, on a five-year basis, several American Funds products and Dodge & Cox funds remain in the black by about 2 percent or 3 percent.

Pimco Total Return is up about 1 percent through December 4, 2008, and about 4.5 percent on a five-year basis.

Other funds in positive territory are those with a short bias, especially ultra-short energy, oil and gas, base metals, and Latin American funds. Those that take these sector focuses via an ultra-long strategy have underperformed their respective sectors.

Through December 2008, the 150 dedicated short-bias funds tracked by Lipper have ticked up 53 percent, while general U.S. Treasury Funds are up 15 percent and general U.S. government funds have improved nearly 5 percent.

Overall, U.S. diversified equity funds are down roughly 42.5 percent. Natural-resource funds have declined more than 54 percent through December 4, 2008.

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Janet Levaux, MBA/MA, is the managing editor of Research; reach her at jlevaux@researchmag.com.

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