Equity funds invested in China clocked up the best first-quarter performance while gold-oriented funds fell from glory to come in at the bottom, according to the latest data from fund-tracking firm Lipper.
China funds rose 0.61 per cent. Gold-oriented funds - last year's stellar performers - lost an average 12.2 per cent, ranking them the greatest overall loser among equity funds.
'Overall, it was a turbulent quarter for mutual funds, and long-term patterns were hard to glean from its results. It is evident that the geopolitical storm enveloping the world has caused fund prices to decouple from future earnings estimates,' said Don Cassidy, senior research analyst at Lipper.
As a group, world equity funds fell 7.39 per cent during the first quarter, erasing all the gains of the last three months of 2002 and seeing sharper downward momentum than their United States counterparts.
European funds fell 9.06 per cent, led by finance stocks, and Japanese funds lost 7.81 per cent. Hong Kong funds dropped 7.37 per cent, with Germany down 16.21 per cent and France 14.54 per cent against a 3.6 per cent drop in the S&P 500 Index.
'Skies over developed markets, which make up the vast majority of international funds' assets, were especially turbulent . . the depreciation of the US dollar, which was propping up international funds amid a slide in asset prices, reversed in mid-March. Ironically, emerging markets provided some shelter from global uncertainty,' Mr Cassidy said.