The Best and Worst Mutual Funds of the Market Correction
Experience is a wonderful teacher, which is how we know that many mushrooms are poisonous and that owls make lousy pets. Investors who lived through the September-to-December market correction also got to learn how their mutual funds fared in an abrupt downturn - and that's something worth knowing.
The Standard & Poor's 500-stock index tumbled 19.4% with reinvested dividends in 96 days from Sept. 20 through Dec. 24. The correction left few markets unscathed: The MSCI Europe, Australasia and Far East index tumbled 13.6%, and the Russell 2000 small-company stock index shed 26.1%.
Fortunately, the stock market roared back after its Christmas Eve low: At this writing, the S&P 500 is up 19.2% since Dec. 24, and for the round trip - from September peak to today - the blue-chip index is down just 3.9%.
What can we learn from this, aside from not selling in a panic? Some managers fare well in reducing losses in a correction; some excel at producing gains on the rebound; relatively few do well in both directions.
Here's a look at how diversified, actively managed mutual funds fared in the most recent market unpleasantness:
