Hogging the spotlight in 2015, with an average return of 86%, Facebook, Inc. (FB), Amazon.com, Inc. (AMZN), Netflix, Inc. (NFLX) and Alphabet Inc. (GOOGL) – more popularly the FANG stocks – have lost their edge this year. Facebook, Amazon, Netflix and Alphabet have lost 3.5%, 27.4%, 22.7% and 9.2%, respectively, in the year-to-date frame. In fact, the downtrend in these stocks has played a crucial role in dragging the Nasdaq, which is by structure tech heavy, deep into the red.

The underwhelming performance of the FANG stocks has naturally taken a significant toll on the technology mutual fund category, which has plunged 16% so far this year.

And since chances of any near-term recovery are bleak, it is perhaps better to avoid technology mutual funds that carry a Zacks Mutual Fund Rank #4 (Sell) or #5 (Strong Sell), as these can be hit harder by the sector’s weakness.

What Made FANG Bleed?

Primarily, inflated valuations following last year’s strong gains have made FANG stocks unpopular among investors amid the ongoing market slump that has stemmed from the China slowdown, relentless oil slump and Fed uncertainty.

Despite the massive fall so far this year, the price-to-earnings ratios (P/E) of these stocks are significantly higher than their respective industry averages. Alphabet, Facebook, Amazon and Netflix currently have P/E ratios of 25.17, 42.11, 104.60 and 270.57, respectively.

The FANG components are clearly struggling to perform with no respite on the horizon. To top it all, fourth-quarter earnings from Amazon failed to impress investors. In spite of favorable year-over-year comparison, the company’s earnings missed the Zacks Consensus Estimate. While Facebook saw the sharpest spike ever after surpassing earnings and revenue estimates, mixed results from Netflix acted as a spoiler. Then again, Alphabet became the world’s most valuable company in terms of market capitalization albeit for a short period of time. The short-lived glory failed to have any significant impact on its investors.

4 Technology Mutual Funds to Avoid

Given dismal year-to-date performances by the FANG players and their weak outlook, we suggest investors to stay away from the four technology mutual funds mentioned below that carry either a Zacks Mutual Fund Rank #4 or #5. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not focused only on past performance, but also on the likely future success of the fund.

Firsthand Technology Opportunities (TEFQX - MF report) seeks capital appreciation over the long run. TEFQX invests the lion’s share of its assets in high-technology companies, which are defined as those with a high level of engineering and scientific approach in their operations. TEFQX may invest in securities of small- and mid-cap companies that are comparatively new. TEFQX is a non-diversified fund.

TEFQX carries a Zacks Mutual Fund Rank #5. The fund has lost 22.1%, 23.5% and 21.5% in the year-to-date, three-month and one-year periods, respectively. Also, TEFQX has an expense ratio of 1.85%, higher than the category average of 1.45%.

Waddell & Reed Science & Technology A (UNSCX - MF report) invests a large chunk of its assets in equity securities of companies involved in operations related to the science or technology sector. The fund also invests in securities of companies that have benefited from technological advancement. UNSCX may also invest in securities of companies located in foreign lands.

UNSCX carries a Zacks Mutual Fund Rank #5. The fund has lost 19.8%, 22.3% and 21% in the year-to-date, three-month and one-year periods, respectively. Also, UNSCX has a front sales load of 5.75% which is higher than the category average of 5.31%.

Goldman Sachs Technology Opportunities A (GITAX - MF report) seeks long-term capital growth. GITAX invests the major portion of its assets in equity securities of technology companies. The fund is expected to maintain a portfolio of securities of 30 to 40 firms. GITAX may invest not more than 25% of its assets in non-U.S. securities.

GITAX carries a Zacks Mutual Fund Rank #4. The fund has lost 19.5%, 21.1% and 13.3% in the year-to-date, three-month and one-year periods, respectively. Also, GITAX has a front sales load of 5.50%, higher than the category average of 5.31%.

Ivy Science & Technology C (WSTCX - MF report) invests the majority of its assets in securities of companies engaged in operations related to the science or technology industry. WSTCX may also invest in foreign securities limitlessly, including those issued in the emerging markets.

WSTCX carries a Zacks Mutual Fund Rank #4. The fund has lost 19.7%, 22.2% and 21.6% in the year-to-date, three-month and one-year periods, respectively. Also, WSTCX has an expense ratio of 1.95%, higher than the category average of 1.45%.