How Funds Fared in the Market Pullback

The stock market’s pullback last week shaved mutual fund investors’ 1997 gains, but most fund categories still boast hefty paper profits year-to-date.

Fund tracker Lipper Analytical Services, which calculates fund category performance as of each Thursday, found that the average general U.S. stock fund fell 4.8% in the five days ended last Thursday.

That was slightly less than the 4.9% decline in the benchmark Standard & Poor’s 500-stock index in the same period.

The five-day period includes the market’s broad slide on the Friday before last Monday’s plunge in prices but excludes the modest rally two days ago.

For the year to date through Thursday, the average general U.S. stock fund still was up 20%, according to Lipper. Some trends among fund categories:

* Technology funds were the worst-hit among major domestic fund categories, as tech shares were hammered on Wall Street. The average tech fund fell 8.4% for the week, cutting the year-to-date gain to 13.2%.

* Gold funds again proved not to be a hedge against stock market trouble, as they lost 13% for the week, ballooning the average year-to-date loss to 30%.

The gold funds’ woes were triggered by news that Switzerland is considering selling much of its official gold reserves.

* Two other traditional hedging categories did work more as hoped: real estate funds, which dipped just 2.6% for the week, and utility funds, off 2.9% for the week.

* In the international sector, Latin American funds suffered the worst blow, plunging 17.6% for the week as Latin markets were hit by fears that Asia’s economic woes will spill over. Year-to-date, the average Latin fund is up 13.3%.

Meanwhile, many battered Asian markets suffered fairly mild additional losses. The average fund that owns Pacific-region stocks excluding Japanese issues was off 3.6% for the week, a small hit considering the year-to-date loss is already 30.8%.

Could those markets be bottoming?