After a dreadful year in 2008, last year turned out to be a big winner for mutual fund investors.
* Domestic stock funds returned around 32 percent, on average, according to Morningstar.
* Foreign stock funds, which fell farther than domestic funds in 2008, returned about 40 percent in 2009.
* Bond funds also posted double digit returns: over 18 percent for taxable bond funds and 15.5 percent for tax-exempt municipal bond funds.
Those are average returns. If your funds were far behind those norms, look hard to see why they lagged. A change might be in order.
Going forward, are there any areas that did poorly last year and thus might appeal to bargain-hunting investors? Long-term government bond funds fell in 2009 but that basically reflects a great year in 2008, when Treasuries were about the only investment that made money.
Among stock funds, the most contrarian play might be those that hold Japanese stocks, which had modest gains in 2009 and still show losses for the trailing five and 10 years. On the domestic side, technology funds are still showing a sizable negative number for average 10-year returns (-6.8 percent a year) so a good tech fund might be worth a modest speculation this year.
