Doug Fabian, Editor of "Successful Investing" and talk show host of "Making Money with Doug Fabian" has just released his Lemon List for the 4th Quarter 2004, with a bitter 5-year performance picture. These are America's worst mutual funds--the ones that underperform their peer group by more than 25% for the past 12 months, and also underperform for the past three and five years.
Huntington Beach, CA (PRWEB) February 16, 2005 -- Doug Fabian, Editor of Successful Investing, and talk show host of Making Money with Doug Fabian," has just released his Lemon List for the 4th Quarter 2004, with a bitter five-year performance picture. The worst performance awards for the past five years fall into two popular fund categories: Large Cap Growth and Science & Technology. The bottom line is, if an investor made a $100,000 investment in one of the worst offending Science & Technology category funds in the year 2000 and held it for five years, they could have less than $30,000 today.
To be classified as a Lemon, the fund must pass strict screening tests: it must have underperformed its peer group average for the past three and five years, and underperformed its peer group by 25% for the past 12 months. The worst offenders, as listed below, were selected by largest asset size and high expense ratios.
Investors and advisors need to wake up to underperformance in the fund industry and take action," says Fabian, who has published his Lemon List since 1998. Take for instance MainStay: Capital Appreciation, (MCSCX) a Large Cap Growth fund with $1.167 billion in assets and a performance of -42% performance over the past five years. With a $100,000 investment beginning in year 2000, the $42,000 lost might have been a down payment on a dream home. The funds expense ratio is 2.05%, which is outrageous when you consider that the average $1 billion fund has an expense ratio of less than 1%.
Particularly sour lemon funds with $1 billion or more in assets and bad performance for five years include Putnam Growth Opportunity (POGAX) at –56.41%; White Oak Growth Stock (WOGSX) at –44.07%; Putnam Voyager (PVOBX) –40.29%; in the Large Cap Growth category. In the Science & Technology category is Janus Global Technology (JAGTX) with a five-year total return of –64.96%; and T Rowe Price Science & Technology (PRSCX) at –64.66%.
Investors would have been much better off selling these funds, and upgrading to a better performer, such as a value fund," advises Fabian. Value funds outperformed other categories for the same five-year period."
For the total list of lemon funds, see www.dougfabian.com. The top 10 Lemon Funds composed of Large Cap Growth and Science & Technology categories are as follows:
TOP TEN WORST OFFENDERS
FABIANS 4Q 2004 LEMON LIST
Large Cap Growth and Science and Technology Catagories
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Doug Fabian began his 26-year investment career in 1979 as a Market Analyst for the Telephone Switch Newsletter--the mutual fund review his father started in 1977. He is now president of Fabian Wealth Strategies, and Editor of Successful Investing, a newsletter advisory service. He regularly appears at seminars around the country and hosts Southern California's number one investment talk radio show, "Making Money with Doug Fabian." Fabian stands out on the pages of the large newspapers such (Wall Street Journal, Los Angeles Times, Orange County Register and The Sacramento Bee); and appears regularly on national television such as CBNC and locally on KTLA in Los Angeles.
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