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So much for letting a little matter such as the largest erosion of investor equity in more than 70 years get in the way of some fund-industry back-slapping. Last week the 2009 Lipper Fund Awards were doled out, recognizing more than 200 “funds that have excelled in delivering consistently strong risk-adjusted performance, relative to peers.”

Maybe I am a tad overly sensitive given the serious depletion of my retirement savings, but isn’t cheering on mutual funds just because they managed to suck less than their peers a bit much? Do we really need to high-five Pyrrhic victors right now? For example, what exactly is award-worthy about the fact that the Dreyfus S&P STARS Opportunities fund has a five-year annualized return of -4.5%? I don’t care if that was a heck of a lot better than its peers; a loss is a loss and doesn’t seem worth celebrating, yet it was anointed the winner among mid cap growth funds for the past five years. You can check out other “winners” here.

It’s not lost on me that a fund that held on better than its peers in a down market will require less digging out when the market rebounds. And I fully get that weathering down markets is a necessary part of a long-term investing strategy. But awards? Come on.

Yet Lipper seems a bit oblivious to the carnage done to 401(k) balances. “Welcome to the Virtuosos” is the greeting on the awards home page (the link above) accompanied by a ridiculously bullish fever-line market graph that looks like the S&P 500 circa 1999, not 2009. Not having attended the ceremony I am unaware if rose-tinted glasses were handed out as party favors. But here’s the absolute cherry on the top of this sundae: Lipper is hawking trophies to the award winners at the bargain basement price of $165 for a large trophy, $119 for medium and $95 for small. Let’s just hope no fund orders up a bunch and sends the bill to its shareholders.

And let us know if you in fact think any funds you own are award-worthy.

-- Carla Fried