Some Springtime Lift For Funds

Cheering in the streets of Baghdad in early April didn't trigger the immediate sharp stock market rally that many pros expected. But as investors gained confidence that the end of armed conflict with Iraq would boost the economy and as first-quarter corporate earnings started coming in better than expected, the market marched steadily higher in April. For the month, the average diversified equity fund climbed a healthy 7.7% and the S&P 500 jumped an even higher 8.2% (see BW Online, Interactive Mutual Fund Scoreboard). Thanks to some cooling of the overheated geopolitical climate, a mixture of international funds turned in the month's strongest results. Foreign funds gained 9.4%, with Europe funds gaining 13.1% and Latin America funds rising a heady 16.2% on average. April's top-performing category, Latin funds, were also helped by an improving economic outlook in Brazil. One standout fund investing abroad was Dessauer Global Equity (DGLEX), which gained a stellar 24.1. Exchange-traded funds that invest in Germany (EWG), Brazil (EWZ), and Sweden (EWD) were also top performers, gaining 23.5%, 21.1%, and 20.8%, respectively. NOT-SO-PRECIOUS METALS. Financial funds gained 10.5% in April as stocks of large money-center banks and diversified global financial-services firms that are expected to do well as the economy recovers recouped some of the prior year's losses. Insurance stocks also fared well, boosting the group. Enterprise Global Financial Services (EGFAX) was the top financial performer, gaining 15.8%. Riskier technology and communications funds benefited from hopes for a rebound in capital spending by corporations, climbing 10.1% and 9.8%, respectively. Firsthand Global Technology (GTFQX) was in the right place at the right time this month and gained 19%. Semiconductors were a particularly strong subsector of technology. ProFunds Semiconductor UltraSector (SMPIX) gained 20.3% in April. Precious metals was the only fund category to post negative returns in April, and even then, that was a scant 0.4% lower. The total return for the volatile metals group is now flat for the past 12 months. But the group's three-year average annual return is 21%. SARS HURT. Other fund categories with defensive characteristics also failed to shine in April. Natural-resources funds climbed only 1% on average, while real-estate funds were up 4.3%. Funds that invest in Asia were hurt by fears of SARS (severe acute respiratory syndrome) and posted gains only in the 0.5% to 0.3% range. Bond funds gained an average of just 1.2% in the month. But the top-performing (and riskiest) fixed-income fund categories did far better. Emerging markets gained 6.4%, and convertibles rose 4.7% in April. High-yield funds were another standout, climbing 4.5%. Ultrashort bond funds, which offer low risk and low returns, gained only 0.1%, posting the worst fixed-income returns of any fund category in April (although their 12-month total return is 2.6%, which beats the great majority of equity funds). Short-term bond funds gained only 0.3%. Bond-fund returns of less than 1% may seem unexciting, but with plenty of global risks and economic worries lingering, a tilt toward safety probably still makes good sense for most fund investors. Edited by Patricia O'Connell A-rated equity funds for April: ABN AMRO Real Estate N AIM Global Health Care A ARK Small Cap Equity A Al Frank Amer Century Equity Inc Inv Amer Century Real Estate Inv Ariel Ariel Appreciation Armada Small Cap Value I Artisan Mid Cap Artisan Small Cap Value BNY Hamilton Sm Cap Gr Inv Baron Growth Bjurman Barry Micro Cap Growth BlackRock International Opportunities Inv A Brazos Micro Cap Y Bridgeway Aggressive Investors 1 Bridgeway Ultra Small Company Bridgeway Ultra Small Company Tax Adv Bruce Buffalo Small Cap CGM Focus CGM Realty Calamos Growth A Clipper Cohen & Steers Equity Income C Columbia Real Estate Equity Z Commonwealth New Zealand Conseco Equity Y Delaware RE Inv Tr A Dodge & Cox Balanced Dodge & Cox Stock Driehaus Asia Pacific Growth Eaton Vance Wldwd Hlth Sciences A Emerald Select Banking & Finance A Excelsior Real Estate Exeter Pro Blend Conservative Term A F Russell Real Estate Securities S FBR Small Cap Financial A FBR Small Cap Value A FMC Select FMI Common Stock FMI Focus Fenimore Equity Income Fidelity Advisor Mid Cap T Fidelity Export & Multinational Fidelity Japan Small Co Fidelity Low Priced Stock Fidelity New Millennium Fidelity Real Estate Investment Fidelity Select Biotechnology Fidelity Select Insurance Fidelity Select Medical Systems & Equipment Fidelity Select Software & Computer Fifth Third Micro Cap Value Instl Fifth Third Strategic Income Instl First American Real Estate Securities Y First American Small Cap Growth Opport Y First Eagle Global A First Eagle Gold First Eagle Overseas A First Investors Multi-State Ins Tax Free NC A Franklin Biotechnology Discovery A Fremont US Micro Cap Fremont US Micro Cap Instl Gabelli ABC Gabelli Gold Gabelli Westwood Realty AAA Hartford Mid Cap A Hennessy Cornerstone Growth Heritage Mid Cap Stock A Hotchkis & Wiley Mid-Cap Value I ICON Energy ICON Healthcare ICON Information Technology ICON Leisure and Consumer IMS Capital Value INVESCO Leisure Inv JPMorgan Mid Cap Value I Janus Adviser Balanced I Janus Balanced Janus Small Cap Value Inv Jensen Julius Baer International Equity A Kinetics Internet Legg Mason Eq Tr Special Invmnt Prim Leuthold Core Investment Liberty Acorn Z Longleaf Partners Lord Abbett Mid Cap Value A MFS International New Discovery A MFS Strategic Value A Mairs & Power Growth Marshall Mid Cap Value Inv Matrix Advisors Value Matthews Asian Growth & Income Matthews Korea Matthews Pacific Tiger Merger Meridian Growth Meridian Value Merrill Lynch Global Small Cap B Merrill Lynch Healthcare B Montgomery Partners Long Short Eqty Plus R Morgan Stanley Health Sciences Trust B Morgan Stanley Instl Small Company Gr B Morgan Stanley Instl US Real Estate A Mosaic Equity Tr Mid Cap Mutual European Z Mutual Financial Services A Navellier Perf Mid Cap Growth Needham Growth Neuberger Berman Genesis Inv OCM Gold Oakmark Equity & Income Ib Oakmark International Small Cap I Olstein Financial Alert C Osterweis PBHG Mid Cap PIMCO RCM Biotechnology D PIMCO RCM Global Healthcare D Parnassus Income Equity Income Perkins Discovery Permanent Phoenix-Duff & Phelps Real Estate Sec A Principal Real Estate A Prudent Bear Prudential Natural Resources A Quaker Aggressive Growth A Reserve Private Eqty Small Cap Growth R Rockland Small Cap Growth Royce Low Priced Stock Royce Opportunity Inv Royce Premier Royce Total Return Royce Trust & Giftshares Inv Rydex BioTechnology Inv Santa Barbara Bender Growth C Schroder Capital Ultra Inv Scudder Health Care S Scudder Micro Cap Invest Security Capital US Real Estate Security Mid Cap Value A Sentinel Small Company A Smith Barney Aggressive Growth A Spirit of America Real Estate A Stratton Monthly Dividend REIT Strong Advisor Small Cap Value Z T Rowe Price Capital Appreciation T Rowe Price Health Sciences T Rowe Price Real Estate TCW Galileo Value Opportunities I Thompson Plumb Balanced Thompson Plumb Growth Touchstone Emerging Growth A Transamerica Premier Growth Oppt Inv Turner Micro Cap Growth USAA Precious Metals & Minerals Undiscovered Managers REIT Instl Value Line Emerging Opportunities Vanguard Capital Opportunity Vanguard Health Care Vanguard LifeStrategy Income Vanguard Precious Metals Vanguard REIT Index Vanguard Wellesley Income Inv WM West Coast Equity A Waddell & Reed Adv Science & Technology A Wasatch Core Growth Wasatch Micro Cap Wasatch Small Cap Growth Wasatch Small Cap Value Wasatch Ultra Growth Weitz Partners Value Weitz Value Westport R Westport Select Cap