As the crisis of confidence in Corporate America reached epidemic proportions, mutual-fund investors suffered steep declines in July. Many investors cashed in their stock funds, exacerbating the declines as portfolio managers were forced to sell holdings to meet redemptions. A slight improvement in second-quarter earnings, most released in the middle of the month, wasn't enough to stop the selling.

By late July, stocks started to seem cheap, Congress passed legislation designed to restore investor confidence, and the market rebounded. Had it not been for a sharp, end-of-month uptick in stocks, the monthly results would have been even worse.

GOLD SLIPS. Still, they weren't pretty. The average U.S. diversified equity fund was down 10% in July. That was worse than the S&P 500 Index, which ended the month down 8%. Precious-metals funds, which usually do well in weak markets, were the worst performers -- down 17% on average. Part of that was attributable to the price of gold slipping, but it was also because the mining stocks those funds invest in were caught up in the selling frenzy.

"People said, 'I don't care if it's a gold stock, it's still a stock,' " says Amaury Conti, a gold-equity trader with U.S. Global Investors. Latin America funds fell almost as far -- 15% -- in large part because of Brazil's economic problems.

There were a lot of bad performers in July, but some of the truly terrible were exchange-traded fund iShares MSCI Brazil Index (EWZ

), which fell 30%, and U.S. Global Investors World Precious Minerals UNWPX

), which plunged 28%.

PESSIMISM PAYS. Unlike most of the bear market, when value funds outperformed growth funds, there was no protection in either strategy, with funds that emphasize cheap stocks doing just as badly as those that emphasize fast-growing stocks. Small-cap funds of all varieties took the downturn equally hard and were off about 13%. Midcap funds fell about 10%, with large-cap funds faring slightly better, falling 8%.

Not surprisingly, the best performing funds were those that bet stocks would go down. ProFunds Ultra Bear URPIX

) was up 13% and Rydex Dynamic Tempest 500 RYTPX

) jumped 12%. The only A-rated funds that held their own (barely) were Gabelli Investor ABC GABCX

), Fifth Third Strategic Income FRACX

), and Fidelity Select Biotechnology FBIOX

), all of which were flat in July.

None of the broad stock-fund categories were in the black for the month. Health-care funds were the best performing category, losing just 4% on average in July. Funds that invest in Asia (not including Japan) fell 5%, as did hybrid funds (which invest in both equities and bonds). Real estate funds fell 6%. Technology funds were down 11%.

BUMPY RIDE. Government bond funds offered some shelter. Long and intermediate term government bond funds gained 2% and municipal bond funds gained 1% in July. However, bond funds that took any credit risk at all turned negative in the month. Convertible, emerging-market, and high-yield bond funds lost 6%, 5%, and 3% respectively in July.

So far, August has been a bumpy ride for mutual-fund investors. But even mixed results are a welcome relief from July's near-relentless selling.

July A-List Funds:

Fund

AIM Global Health Care A

AIM Mid Cap Core Equity A

AIM Small Cap Growth A

ARK Small Cap Equity Retail A

Advisors Inner Circle FMC Select

Amer Century Equity Inc Inv

Ameristock

Ariel

Ariel Appreciation

Armada Small Cap Value I

Artisan International

Artisan Mid Cap

BNY Hamilton Sm Cap Gr Inv

Babson Shadow Stock

Baron Growth

Berger Small Cap Value Inv

Bjurman Micro Cap Growth

Bridgeway Aggressive Investors I

Bridgeway Ultra Small Company

Bridgeway Ultra Small Company Tax Adv

Bruce

Calamos Growth A

California Investment S&P Mid Cap Index

Clipper

Conseco Equity Y

Delaware RE Inv Tr A

Dodge & Cox Balanced

Dodge & Cox Stock

Dreyfus Index Fds Midcap Index

Eaton Vance Wldwd Hlth Sciences A

FBR Financial Services A

FBR Small Cap Financial A

FBR Small Cap Value A

FMI Common Stock

FMI Focus

Federated Mid Cap Index

Fenimore Asset Management Tr Value

Fenimore Equity Income

Fidelity Advisor Mid Cap T

Fidelity Export & Multinational

Fidelity Japan Small Co

Fidelity Low Priced Stock

Fidelity Mid Cap Stock

Fidelity New Millennium

Fidelity Select Air Transportation

Fidelity Select Biotechnology

Fidelity Select Brokerage & Investment

Fidelity Select Defense & Aerospace

Fidelity Select Insurance

Fifth Third Strategic Income Adv

First American MicroCap Y

First American RE Sec Ret Y

First Eagle Fund Of America Y

First Eagle SoGen Overseas A

Franklin Microcap Value

Fremont US Micro Cap

GAMerica Capital A

Gabelli Investor ABC

Galaxy Sm Cp Value Trust

Hennessy Cornerstone Growth

Hotchkis & Wiley Mid-Cap Value I

ICON Financial

ICON Healthcare

ICON Information Technology

ICON Leisure and Consumer

ING International Small Cap Growth A

INVESCO Leisure Inv

Janus Adviser Balanced

Janus Adviser Capital Appreciation

Janus Adviser Core Equity

Janus Aspen Cap Appreciation Instl

Janus Aspen Core Equity Instl

Janus Balanced

Janus Core Equity

Jensen

Julius Baer International Equity A

Keeley Small Cap Value

Kinetics Internet

Liberty Acorn Z

Liberty Select Value A

Longleaf Partners

Longleaf Partners Small Cap

Lord Abbett Mid Cap Value A

MS Fincl Svcs Tr B

MS Hlth Sciences B

MS Instl Small Co Gr B

MS Instl US Real Est A

Mairs & Power Growth

Marshall Mid Cap Value Inv

Matthew 25

Merger

Meridian Growth

Meridian Value

Merrill Lynch Global Small Cap B

Merrill Lynch Healthcare B

Merrill Lynch Master Small Cap Value B

Mosaic Equity Tr Mid Cap

Munder Micro Cap Equity A

Mutual Discovery Z

Mutual European Z

NI Numeric Investors Micro Cap

Navellier Perf Mid Cap Growth

Needham Growth

Neuberger Berman Genesis Inv

Oakmark Equity & Income I

Olstein Financial Alert C

One Group Mid Cap Value

Osterweis

PBHG Large Cap Value

PBHG Mid Cap Value

PIMCO RCM Global Health Care

PIMCO Renaissance A

Parnassus Income Equity Inc

Quaker Aggressive Growth A

RS Diversified Growth A

Reserve Private Eqty Small Cap Growth R

Rockland Small Cap Growth

Royce Low Priced Stock

Royce Micro Cap Inv

Royce Opportunity Inv

Royce Pennsylvania Mutual Inv

Royce Total Return

Royce Trust & Giftshares Inv

Santa Barbara Bender Growth Y

Security Capital US Real Estate

Security Mid Cap Value A

Sentinel Small Company A

Sequoia

Smith Barney Aggressive Growth A

Smith Barney Security & Growth A

Standard & Poor's MidCap 400 Depositary Rcpt

State Street Research Aurora A

Stratton Monthly Dividend REIT

T Rowe Price Capital Appreciation

T Rowe Price Financial Services

T Rowe Price Health Sciences

T Rowe Price Mid-Cap Value

T Rowe Price Small Cap Value

Thompson Plumb Balanced

Thompson Plumb Growth

Tocqueville Small Cap Value

Touchstone Emerging Growth A

Transamerica Premier Balanced Inv

Transamerica Premier Growth Oppt Inv

Turner Mid Cap Growth

Turner Small Cap Value

Value Line Emerging Opportunities

Value Line Special Situations

Vanguard Capital Opportunity

Vanguard Health Care

Vanguard International Explorer

Vanguard Wellesley Income

Vontobel US Value

WM West Coast Equity A

Waddell & Reed Adv Science & Technology A

Wasatch Core Growth

Wasatch Micro Cap

Wasatch Small Cap Growth

Wasatch Ultra Growth

Weitz Partners Value

Weitz Value By Amey Stone in New York