NEW YORK - Mutual-fund investors should get a feeling of satisfaction when they read their 2009 year-end statements.
A fourth-quarter blip padded the already huge gains that recovering stocks and funds enjoyed this year. The best performances came from parts of the market that will benefit from a recovery in the world's economy. Among the year's top performers: funds that focused on high-tech stocks, materials producers, and gold.
Global science and technology funds are on pace to return an average 8.5 percent for the October-December quarter and 69.5 percent for the year, according to fund tracker Lipper Inc. The latest figures reflect trading through Christmas Eve and so don't include the final four trading days of the fourth quarter.
The Standard & Poor's 500 index is up 6.7 percent for the quarter and 24.9 percent for the year.
Meanwhile, funds that invest in the stocks of basic materials producers returned 10.3 percent in the quarter and 66.8 percent for the year as commodities prices jumped because of a drop in the dollar. Commodities are priced in dollars and become more affordable to foreign buyers when the dollar falls.
Prices for commodities also rose as expectations grew that demand for goods and materials would pick up as economies strengthened, particularly in developing countries like China, Brazil, and India.
Gold funds returned 8.5 percent in the fourth quarter and 52.9 percent for the year as the dollar fell.
Diversified U.S. stock funds made an average return of 31.7 percent for the year. That compares with a negative return of 37.5 percent in 2008. The funds tend to have varied holdings instead of focusing on a particular industry.
Hank Smith, chief investment officer at Haverford Investments in Radnor, said so many investors were fearful of what happened in 2008 that they pulled out of the market before it began to bounce back. Many have not returned.
"Fear hasn't gone to greed," he said. "They're putting money into bond funds at a huge rate and probably at the wrong time."
Smith said investors who left the market should be looking to areas such as consumer staples and health care that were left behind in the market's 2009 rally rather than putting money into areas that already did well and now risk losing steam.
To be sure, the stock market is still down by about one-third from its peak in October 2007. But the returns from this year are a strong sign that investors expect the economy will continue to recover in 2010.