) -- Call it the bad bear news.

Sixteen of the 20 worst-performing stock mutual funds in the fourth quarter bet against a rebound in equities, sparking contrarian-fund carnage. Investors even took in stride the most recent dismal payroll report showing 85,000 U.S. jobs were lost in December, as fewer jobs means lower payroll expenses in the short term, more fiscal stimulus, sustained low interest rates and a faster route back to long-term profitability. To think that bear funds were all the rage a year ago.

Of the contrarian funds, none did worse than

ProFunds UltraShort Latin America

(UFPIX) - Get Report

, crashing 28% in the last three months of the year and 86% in 2009. It was the wrong time to be selling short companies like

Vale SA

(VALE) - Get Report

, up 26% in the quarter, and

Itau Unibanco Holdings

(ITUB) - Get Report

, up 13%. Both are members of the

Bank of New York Latin America 35 ADR Index


The two companies are also members of the

Bank of New York Emerging Markets 50 ADR Index

, to which the second-worst performing contrarian fund,

ProFunds UltraShort Emerging Markets

(UVPIX) - Get Report

is double inversely leveraged. Two other members of the index on the rise in the fourth quarter,

Taiwan Semiconductor

(TSM) - Get Report

, up 4.4%, and

Teva Pharmaceuticals

(TEVA) - Get Report

, up 11%, contributed to a 20% fourth-quarter loss for the fund.

The next three contrarian funds doubled down against the

Nasdaq-100 Index


Direxion Monthly NASDAQ 100 Bear 2x Fund



ProFunds Ultra Short NASDAQ-100 ProFund

(USPIX) - Get Report


Rydex Inverse Nasdaq-100 2x Strategy Fund


each lost 17% from Sept. 30 to Dec. 31 on gains of 14% in


(AAPL) - Get Report

, 19% in


(MSFT) - Get Report

and 25% in


(GOOG) - Get Report


ProFunds Ultra Short Dow 30 ProFund

(UWPIX) - Get Report


Rydex Inverse Dow 2x Strategy Fund

(RYCWX) - Get Report

shed nearly as much on Dow Industrial advances of 9.4% in

International Business Machines

(IBM) - Get Report

, 12% in


(MMM) - Get Report

and 9.3% in


(CVX) - Get Report


The funds rated below are ranked in the "sell" range. They have the worst possible combination of poor performance and excessive volatility. Negatively leveraged funds have inherent risks such as the lack of diversification, daily compounding effects where the fund's results can diverge sharply from the underlying index and policies that permit frequent-trading strategies that can decrease from performance and increase expenses.

For the most highly rated mutual funds, check out our

Top Rated Mutual Funds


Kevin Baker became the senior financial analyst for TSC Ratings upon the August 2006 acquisition of Weiss Ratings by, covering mutual funds. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.