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The Worst of the Worst Stock Funds

Investors avoided emerging markets, growth funds -- you name it -- in the third quarter, <I>The</I> Ratings' models show.
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Ratings' stock fund ratings for the third quarter reflect global and domestic markets: Investors are pulling out of risky emerging markets and repatriating much-needed funds back to the U.S.

Even in the U.S., there is nowhere to hide except Treasuries as global recessionary fears brew. Energy and natural resources continue their downward spiral as prices fall. (Oil continues to drop despite production cuts announced by OPEC.)

Finally, growth funds are being particularly hard hit by the stock market declines as some valuations get punished in light of economic weakness.

Most of these funds have experienced a decline of more than 40% for the three months ended Sept. 30. It is likely that more pain is ahead for each of these three categories of funds.

The top-five laggards are listed below.

Sam Patel, CFA, is the manager of mutual fund research for the Ratings.

In keeping with TSC's Investment Policy, employees of Ratings with access to pre-publication ratings data must pre-clear any potential trade through the legal department, and are prohibited from trading any security that is the subject of an unpublished rating revision until the second business day after the rating is published.

While Patel cannot provide investment advice or recommendations, he appreciates your feedback;

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