Pine money manager Ron Muhlenkamp had a blunt message about how things went last year for shareholders of his $1.3 billion Muhlenkamp Fund [Ticker: MUHLX]: "We had a lousy year."

The veteran mutual fund manager was caught holding more than his fair share of home builders and financial stocks as the subprime crisis unfolded, a large reason why fund holders experienced negative total returns of 9.7 percent last year. It was Muhlenkamp's worst performance since 2002, when losses amounted to 20 percent.

The fund bounced back in 2003 by generating returns of 48 percent, but if Muhlenkamp's first-quarter performance is any indication -- the value of the fund's shares retreated another 10.3 percent -- a similar rebound this year is unlikely.

An analysis of six other funds based in the region reveals their managers also took their lumps. The Cookson Peirce Core Equity Fund [CPEQX], managed by the Grant Street money manager Cookson, Peirce & Co., easily outdistanced the pack in 2007 with a 29.7 percent total return. But the fund, with assets of $19 million, turned in the poorest first-quarter performance among the seven local funds, shedding 13 percent of its value.

The Stewart Capital Mid Cap Fund [SCMFX], managed by Stewart Capital Advisors, launched in June just as Wall Street's woes were getting under way. Investors in the $10 million fund had a negative return of 8.4 percent in the second half of 2007 followed by a 7.3 percent loss in the first quarter. Stewart Capital is a subsidiary of S&T Bancorp, of Indiana, Pa.

The red ink occurred even though Stewart reduced its holdings in financial stocks from 16.7 percent of the portfolio in June to 7.6 percent by year's end. Stewart Capital President Malcolm E. Polley told investors in his January letter that the fund sold mortgage insurer PMI in July and two title insurance companies, Fidelity National Financial and Old Republic International, by October.

The fund, which places more emphasis on finding good stocks than allocating investments among different sectors, also lightened up on retail stocks by liquidating its position in Limited Brands, whose operations include Victoria's Secret.

Investors in Snow Capital Opportunity Fund [SNOAX] broke even last year and saw the value of their investment decline 8.5 percent in the first quarter of 2008. The $250 million fund is based in Franklin Park. Its objectives are principal preservation and long-term capital appreciation. At the end of last year, its top three holdings were General Electric, American International Group and Gap.

Fort Pitt Capital Total Return Fund [FPCGX] generated negative returns of 1.8 percent last year and declined 10.2 percent in the first quarter. The Green Tree-based fund, which has assets of $42 million, invests for long-term capital appreciation and income, relying mostly on stocks of large and midsize companies.

Its year-end report shows managers Charles Smith and Douglas Kreps had invested 23 percent of the fund's assets in financial stocks, up from 21.5 percent at the end of the third quarter. Industrial stocks accounted for 31 percent of the portfolio, up from 24.4 percent as of Oct. 31.

Fort Pitt's top three holdings at year-end were AT&T, Honeywell and Loews. Bank of New York Mellon and PNC Financial Services Group were among the fund's 10 largest positions.

Two funds launched last year by Symons Capital Management, of Mt. Lebanon, finished their first year in the black, but took it on the chin in the first quarter.

Symons Alpha Growth Institutional Fund [SAGIX] delivered a total return of 1.6 percent in 2007, but fell 9.8 percent in the first quarter. The $20 million fund seeks long-term capital appreciation from stocks trading at attractive prices, targeting companies with market capitalizations greater than $800 million. The fund's largest three holdings as of Dec. 31 were Archer-Daniels-Midland, Pepsi and Pfizer.

Its counterpart, Symons Alpha Value Institutional Fund [SAVIX], has the same objective, targeting similarly sized companies that appear to have limited downside risk. The $4 million fund generated a 2 percent return in its first year but lost 4.3 percent in the first quarter. Best Buy, Kraft Foods and General Mills were its three largest holdings at year-end.

To put the performances in perspective, it's important to keep in mind that results for one quarter or four are not the basis for sound long-term investing.

Most advisers recommend looking at a fund's performance over five years or longer. Only two of the local funds have been around for at least five years, and both have outperformed the Standard & Poor's 500 over that period.

Muhlenkamp produced annualized returns of 12 percent, and Fort Pitt's fund generated annualized returns of 13.1 percent for the five years ended March 31. That compares with the 11.3 percent return turned in by the S&P 500.

Finally, investors should consider a fund's expenses, and those investing in taxable accounts should consider how big of a bite taxes will take out of their returns.