NEW YORK -- The stellar gains or demoralizing slides that frequently enliven the listings of mutual fund performance were missing during the past quarter.
According to rankings by Lipper Analytical Securities Corp., equity funds dipped fractionally (0.84 percent) and taxable bond funds rose a bit (2.33).
But the dramatic quarterly moves were in narrow areas, and in many cases these moves were mildly deceiving because they only marginally affected long-term trends.
Still, the first half of 1991 has been quite kind to investors. General equity funds grew by 16.17 percent in the first six months of the year. "The gain in the first half is still very high by historical standards," wrote Michael Lipper is his commentary on fund performance.
The best performers were those invested in high-yield "junk" bonds and precious metals, the worst in science and technology, essentially reversing the rankings of the first quarter.
Financial service funds and regional bank stock funds also did reasonably well.
Poor numbers were also registered in the past quarter by health and biotechnology funds and environmental funds.
"Some of the highest-flying sectors of the market during the first half were health and technology," said Eric Kobren, editor of Fidelity Insight, which is published in Wellesley, Mass. "Those are not the places to be right now."
But even the second-quarter laggards still showed strong, double-digit increases for the full six-month period.
For instance, T. Rowe Price's science and technology fund was one of the five worst performing funds for the quarter, with a 12.61 percent loss. Yet it was up a heady 25.5 percent for the first half of the year.
Similarly, Price's New America Growth Fund, invested in small service companies, was barely positive for the quarter, up 0.6 percent, but was ahead 26.7 percent for the half.
"This quarter has been a perfect example of the lumps you have to take in small stocks and technology," said Price spokeswoman Jane White. "You have to have the courage, or stubbornness, to believe that they outperform the averages over time, which has been the case."
For precious metals in particular, but also junk bond funds to a more limited degree, the quarter was a happy three months at the end of a difficult 12 months. Gold funds, for instance, were up 8.04 percent in the quarter, but down 5.84 percent over the past 12 months.
Junk bond funds, up 6.54 percent in the quarter and 21.62 percent since the beginning of the year, are up just 8.28 percent over the past 12 months. Stripped of their high dividend payouts, the net asset value of junk bond funds is actually down 5.82 percent. And, given the difficulty of actually assigning prices to these rarely traded securities, the real performance might very well be worse.
More striking than the quarterly vacillations were changes in five-year results.
Net gains over the period were less than half as great as they were in the Lipper survey published at the end of 1989.
A significant, but not as great, slide has occurred since the beginning of the year. Many former leaders, particularly those invested in Asia and telecommunications, dropped off the top 25 list as big gains pegged to a falling dollar, booming Japanese market, and cessation of AT&T's monopoly became irrelevant.
"One of the things we were yelling about for a long time is the rate of growth was unsustainable," Mr. Lipper said in an interview.
Money managers earned their keep in the first half, turning in better results than either the Standard & Poor's 500 and the Dow Jones Industrial Average.
The Lipper numbers show some interesting results for Fidelity. The Magellan Fund, the fund Morris Smith inherited from Peter Lynch, is still the leader over the past 10 years with a gain of 583.63 percent. But Magellan's lead over its nearest competitors has been shrinking steadily, and market watchers say its reign at the top of the charts could be coming to an end.
Over the past year, three Fidelity funds, Select Biotechnology, Select Medical and Select Health were the top three performing funds in the country, with all recording gains of better than 40 percent. Select Health is also one of the top performers over the past five years.
In the most recent quarter, the top Fidelity fund was the small and unglamorous Select Paper and Forest Fund. Fund manager Robert Chow said that was not terribly surprising.
"It is quite predictable," he said Tuesday. "When the recession hits bottom cyclical stocks like these do the best."
Mr. Chow predicted that those stocks would continue to do well over the next few years, although he conceded that their performance would be influenced by the strength or weakness of the recovery.
The fund started the year with just $4.6 million but has since grown to $71 million.