Stock Funds Fell In Sept., But Rose In Third Quarter; Small-Cap Growth held on for a 9.33% advance for latest three months.(SERIES: MUTUAL FUND QUARTERLY)(IBD SPECIAL REPORT)

Byline: KEN HOOVER

September lived up to its reputation as the worst performing month for the stock market, leading mutual fund investors to post their first monthly loss since February.

But losses were modest. If this is the worst a bull market can throw at investors, there's not much to worry about.

The average domestic stock fund dropped 2.99% for the month. But that didn't put too much of a dent in the quarter or the year. The average fund was up 4.42% for the third quarter and 18.5% year to date through Sept. 30, according to Lipper Inc.

Keeping the usual pattern for a bull market, small stock funds outperformed large stock funds, and growth funds outdid value funds.

For September, the average U.S. diversified stock fund lost 1.64%. Small-cap growth funds lost the most, 2.45%. Small-cap value funds lost the least, 1.5%.

For the quarter, small-cap growth was the best investing style, up 9.33%. Large-cap value did the worst, up 1.93%. Year to date, small-cap growth rose 28.39%. Large-cap value was up 13%.