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Star Gazing: Contrasting Year End 1999 with 2000

Even stars can't save some funds when their style is on the outs.

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We're not accusing anyone of becoming irrationally exuberant again. But before we get too excited about the modest comeback technology stocks and funds have staged so far this year, it can't hurt to review recent history for a lesson on how quickly things can change.

Technology still may be one of the most promising sectors for growth investors, but you only have to compare the 1999 star ratings of some of the business' biggest mutual funds with their ratings from the end of 2000 to remind yourself that it also is one of the most volatile. Not surprisingly, technology-heavy, aggressive growth funds tended to lose stars last year, while value-oriented, conservative offerings typically gained. 

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