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Fund Spy

Three Funds With a Bad Case of the Deja Blues

This year has not been 2008 all over again for these offerings, to the detriment of their relative returns.

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What a difference a crisis makes. A month ago I highlighted a couple of funds that have had a much better time of it during 2011's sovereign debt debacle than they did in 2008's subprime-mortgage implosion. If nothing else the cases of Clipper (CFIMX) and Longleaf Partners Small-Cap (LLSCX) showed that one lousy bear market does not a perennial laggard make. Conversely, putting up strong results in one tough market doesn't guarantee a fund will tough it out again in the next. Indeed, a number of notable funds that fared better than 90% of their peers in 2008 are trailing 90% of them so far in 2011. Here's a look at three offerings with the biggest absolute losses so far this year.

Theory of Relativity
You can't eat relative returns, but they can eat you. Fairholme (FAIRX) has lost less so far in 2011 than it did in 2008, yet investors who flocked to the fund three years ago are fleeing now. Of course, back then the stock market and most other large-cap stock funds lost much more than Fairholme; in 2011 through Oct. 31, the fund trailed the S&P 500 Index by an apocalyptic 25 percentage points. It lagged the large-value norm by nearly 22 points.

Dan Culloton has a position in the following securities mentioned above: CFIMX. Find out about Morningstar’s editorial policies.