< Checking Your Mutual Fund Returns? Better Sit First

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ARI SHAPIRO, host:

And investors are starting to get their latest mutual-fund statements. The third quarter of the financial year just ended. If you're about to check yours, we recommend that you do so sitting down. NPR's Yuki Noguchi has this preview of what you might find.

YUKI NOGUCHI: Here's what's not going to surprise you. Your mutual-fund returns are going to be bad. But what might surprise you is how it's bad. Here's John Coumarianos, a mutual-fund analyst with Morning Star.

Mr. JOHN COUMARIANOS (Mutual-Fund Analyst, Morning Star): I wouldn't say any of the stock categories came out unscathed, except for possibly real estate.

NOGUCHI: Strange, right? Here we are in the midst of a huge crisis that started with real estate, and domestic real-estate funds are down only 4 percent this year. Given how this year's going, that's actually good. Coumarianos says it's because real-estate funds already took their beating last year. They also benefited from interest rate cuts earlier this year and they pay dividends, which makes them attractive investments. You'd think, given the massive failures in banking, that the absolute worst performance would be in financials, but no. Coumarianos says technology and telecommunications funds fared worse.

Mr. COUMARIANOS: The other unusual thing about this year, I suppose, is that foreign stocks tended to do a bit worse than domestic markets. And that's a kind of reversal of the trend that we've seen for most of this decade.

NOGUCHI: Foreign stocks, he says, are closely tied to commodities, which have taken a beating since the summer. The bottom line is this.

Mr. COUMARIANOS: There's been nowhere to hide, really.

NOGUCHI: So, it's understandable if you're feeling like running away from stocks, but Coumarianos advises not to. He's been buying stocks that he believes are near the bottom. Yuki Noguchi, NPR News.

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