Bond funds reign in quarter
Associated PressNEW YORK -- Stock mutual funds posted widely mixed results in the second quarter of 1998, taking a back seat to bond funds for a change.
Quarterly figures published yesterday by the research firm of Lipper Analytical Services showed the average broadly diversified domestic stock fund with a negative return of 0.29 percent for the April-June quarter. Domestic long-term bond funds, by contrast, gained 1.56 percent.
The small change for stock funds overall masked a wide divergence among different types of funds. Domestically, funds focusing on large stocks did well while small-stock funds languished.
Internationally, European funds prospered while Pacific and Latin American funds dropped sharply.
Even though domestic stock funds flattened out in the second quarter, they still managed an average gain of 11.75 percent for the first half of the year, following through on their double-digit gains in 1995, 1996 and 1997.
Index funds modeled on Standard & Poor's 500-stock composite index, which is dominated by big blue chips, led the second-quarter parade among broadly diversified domestic stock funds, posting a return of 3.18 percent, assuming reinvestment of dividends. Growth funds gained 1.85 percent.
At the other end of the scale, small-cap funds lost 4.11 percent and micro-cap funds were down 4.19 percent.
Among sector funds, the standouts of the past three years, financial services and telecommunications funds, chalked up modest gains for the quarter.
But several other sector categories took a hit, including natural resources, down 10.46 percent as the price of oil slumped, and real estate funds, down 5.09 percent.
On balance, Lipper's average of more than 500 sector funds finished the quarter with a loss of 2.17 percent.
Internationally, European funds gained 6.30 percent, bringing their return for the past 12 months to 33 percent. But Latin American funds tumbled 19.01 percent in the second quarter, and Pacific funds excluding Japan fell 26.93 percent.
