Mutual Funds/Managed Investing: Most Funds Lag S&P 500 in 2nd Quarter
Most mutual funds lagged the market in the turbulent second quarter, with international funds finishing on top and utility funds on the bottom of the performance scale.</br></br>The average general equity fund gained 1.63%, falling short of the 5.02% advance in the Standard & Poor's 500-stock index, with dividends reinvested, according to Lipper Analytical Services Inc. It was the fifth consecutive quarter that the average fund trailed the broad market measure.</br></br>Many fixed-income funds slid into negative territory for the first time since the second quarter of 1984, following violent bond-price swings during the spring. Gold funds fell back sharply from their top spot in the first quarter, as precious-metals fervor cooled along with fears of rising inflation. Lipper ranks 1,278 funds in 20 categories.</br></br>For the first six months, the average general equity fund logged a gain of 21.09%, compared with an increase of 27.44% for the S&P 500.</br></br>The second quarter's top fund was Dreyfus Strategic Aggressive Investing. It led the pack by capitalizing on the market's volatility through the use of stock-index futures and options, netting a gain of 42.51% in its start-up quarter. Bringing up the rear was Strategic Capital Gains. The fund, run by Dallas-based Strategic Management, bet heavily on a troubled oil-technology company -- and dropped 20.42%.