NEW YORK (AP) _ Mutual funds took a hard hit in the first quarter, with all classes of stock funds posting losses for first time in 21 years.

``It's red all across the board. It was just a really ugly quarter,'' said Mary Cho, research analyst for Lipper Inc., a Summit, N.J. firm that tracks the fund industry.

The widespread suffering among funds came as investors saw signs, such as inventory gluts and layoffs, that the slumping economy had hurt safer blue chip sectors and not just the riskier high-tech companies. The last time all classes of funds ended up in the red was the first three months of 1980, according to Lipper.

Small capitalization value funds, which invest in undervalued companies with market capitalizations of under $200 million, registered the slimmest losses, off 0.7 percent overall in the first three months of 2001, according to Lipper data through Thursday. Cho said funds benefited as investors retreated from large capitalization funds, which suffered late last year as their tech holdings were battered.

``The value (fund) style didn't get hit as hard in the tech sector meltdown as investors were looking at sectors that offered more stability and dividend paying shares,'' Cho said.

Small cap funds also got a lift from the three interest rate cuts the Federal Reserve has made this year, Cho said, because borrowing costs for smaller companies typically are higher.

Among sector funds, those that fare better in bearish markets and a slowing economy were the least hit. Funds that focus on real estate shares fell 2.1 percent, while those that concentrate on technology suffered the biggest losses, down 34.5 percent.

As for world equity funds, the biggest winners were China region funds, off 4.8 percent. Canadian funds, suffered the most, falling 18.3 percent.

Funds that focus on companies in Europe and Japan, where economies are facing slowdowns, also saw declines. European region funds lost 16.6 percent, while Japanese funds fell 7.3 percent.