Skip to Content
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.

Mentioned: , , , , , , , , ,

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.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.