Triple-digit scores had been possible only in basketball, but mutual funds have finally caught up -- 168 funds burst through the triple-digit barrier in 1999, according to year-end data from fund trackers Wiesenberger, Rockville, Md.
Between the debut of the first mutual fund in 1924 and 1998, only 21 mutual funds returned more than 100% in a single year; and only the Fidelity Magellan Fund managed to do it more than once (in 1965 and 1967). But Wiesenberger found that two factors combined to make 1999 one of the best years ever for mutual fund returns -- the technology stock explosion and strong economic recovery in Japan.
The average U.S. equity mutual fund (excluding sector funds) returned 26.95% in 1999, making it the third best year ever. But Wiesenberger found that the average technology sector mutual fund returned 122% and the average Internet sector fund returned 131%. In fact, all five Internet mutual funds with track records longer than one year made it into the triple-digit club.
The top performing fund last year -- the $130 million Nicholas-Applegate Global Technology Fund -- was perfect evidence of the overwhelming strength of technology stocks (all the non-Japan funds in the top 10 had a lot of tech exposure, and four were Internet- or tech sector-specific funds). It returned 496.08%, the highest one-year return Wiesenberger has ever recorded.
In second place was the $1.2 billion Warburg Pincus Japan Small Company Fund, with a 330.19% one-year return, a clear beneficiary of Japan's economic improvement, especially for small-capitalization companies. Japan-related funds returned an average of 117% in 1999, according to Wiesenberger data, and three were in the top 10 performers for the year.