A recent Morningstar article outlines seven mutual fund horror stories. In addition to the Legg Mason Value Fund (symbol LMVTX) and Schwab YieldPlus Fund (symbol SWYPX) and the Regions Morgan Keegan funds, which are the subject of stories we have reported recently, several other hard-hit mutual funds are discussed.
For example, the Eaton Vance Greater India fund (symbol ETGIX) has lost over 44%! The article, found in the Morningstar Fund Investor’s “Annual Guide on Where Not to Invest”, reminds investors to be especially wary of international funds, particularly those focusing on securities issued in China and India.
Also mentioned in the report is the Kinetics Market Opportunities fund (symbol KMKNX) which has lost over 30% this year. While this same fund gained 34% the previous year, its very narrow focus made it particularly susceptible to volatility. Large holdings of NASDAQ, CME, NYSE, and Legg Mason caused the fund to plummet.
Nor were bond funds exempt. For example, despite a falling interest rate environment, the Oppenheimer Rochester National Muni (symbol ORNAX) is down 1more than 20% in the past year. While the fund had performed well in the previous decade, apparently because of tobacco related bonds, the funds parameters left it wide open to downside risk when the climate reversed.
Finally, the author mentions Touchstone Large Cap Value fund (symbol TLCAX) which is down almost 30% this year and 52% for over the past 12 months! In this fund heavy weighting in financial shares is the culprit. Reportedly, the fund manager exacerbated the situation by attempting to do some “bottom-fishing” and the fund’s large exposure to mortgages backfired. Top holdings Fannie Mae (FNM) and Freddie Mac (FRE) along with Wachovia (WB) and Washington Mutual (WM) also contributed to the fund’s woes. Non-financials Ford Motor (F), Centex (CTX) and Motorola MOT did not help.
Those who have suffered substantial losses in mutual funds and other investments should contact the stockbroker fraud law firm of Shepherd Smith Edwards & Kantas LTD LLP today. With no obligation you can discuss with one of our attorneys whether we may be able to assist you to recover your losses.