It's time for mutual fund investors to decide whether the cup is half empty or half full.
The good news, for example, is that Merrill Lynch Technology Fund Class "A" gained 14.89 percent in the first quarter to rank among the nation's best-performing stock funds.
The bad news is that the fund had been up a whopping 23 percent just 10 days before quarter's end, before the market deluge took its toll.
It's that kind of volatile year. The average stock fund slipped 3 percent, with funds specializing in emerging markets, small company growth and utilities hit hardest.
Such tumult will make it more difficult, though not impossible, to sell funds to new investors, believes A. Michael Lipper, president of Lipper Analytical Services, which tracks the nation's funds.
"We're not seeing much in fund redemptions yet, though investors are switching within fund families," noted Lipper, who considers the market correction overdue.
"They're switching out of funds that emphasize emerging markets, mortgage-backed securities and municipal bonds, while moving into money-market funds, shorter-term Treasuries and run-of-the-mill stock funds."
Funds investing in the reviving Japanese stock market and technology ranked highest.
"Foreign investors became aggressive buyers in the Japanese market because the other markets did so well in 1993," explained Shigekazu Kurishima, chairman of Nikko Capital Management U.S.A., whose Capstone Nikko Japan Fund was top performer in the quarter.
Japanese electronics firms such as NEC, Alps, Nitto Electric and Stanley Electric prospered in his fund.
"I'm not a total bull about the Japanese market, but I see opportunities because four long years of weak corporate profits are ending," said David Warren, portfolio manager of T. Rowe Price Japan Fund.
Stocks of Murata, a maker of tele communications components, and Komori, manufacturer of printing machinery, each gained 35 percent. New purchases include Teijin in textiles, Mitsui Petrochemical and Sony Corp.
"Technology stocks are volatile, and we sometimes have as much as 90 percent of our portfolio in cash after we sell and await new opportunities," said James Renck, portfolio manager of Merrill Lynch Technology Fund, Classes A and B.
Micron Technology rose 80 percent, while Integrated Device Technology ran up 100 percent before it was sold. Other gainers were Cisco Systems, Cabletron Systems and and Motorola Inc. He recently added Acclaim Entertainment.
"I've been more bullish on personal computers than some other people, because I see international opportunities based on the fact PCs are becoming obsolete quicker and replaced faster," said Harry Lang, manager of Fidelity Select Electronics. "In addition, the Japanese are falling behind in semiconductor technology and the U.S. is regaining leadership."
Top funds in the first quarter among those with affordable minimum requirements, according to Lipper, were:
* Capstone Nikko Japan Fund, Houston; $2.8 million in assets; 4.5 percent "load" (initial sales charge); $200 minimum initial investment; up 21.66 percent.
* Wright Equifund Italian, Bridgeport, Conn.; $2.5 million in assets; no load; $1,000 minimum; up 18.69 percent.
* T. Rowe Price Japan Fund, Baltimore; $117 million in assets; no load; $2,500 minimum; up 16.96 percent.
* The Japan Fund, New York; $658 million in assets; no load; $1,000 minimum; up 16.84 percent.
* Fidelity Investments Japan Fund, Boston; $282 million; 3 percent load (being waived through May 1994); $2,500 minimum; up 15.07 percent.
* Merrill Lynch Technology Fund, Class A, New York; $168 million assets; 6.5 percent load; $1,000 minimum; up 14.89 percent.
* Merrill Lynch Technology Fund, Class B; same as above except with deferred "rear-end" load that starts at 4 percent and decreases 1 percent annually; $190 million in assets; up 14.67 percent.
* G. T. Japan Growth Fund A, San Francisco; $102 million in assets; 4.75 percent load; $102 million in assets; $500 minimum; up 10.94 percent.