NEW YORK (CNN/Money) - During the tech boom, fund manager Doug MacKay could feel the love, baby.

His fund, Red Oak Technology Select, soared to $1.8 billion in assets. Bread-and-butter tech holdings such as EMC nearly doubled in value in 1999. Investors were throwing new cash at the fund -- around $30 million a day.

Now, however, he can't catch a break. One of his top names, Novellus, raised its earnings target for the second quarter earlier this week but was still one of the biggest losers on the Nasdaq, falling 7 percent. Indeed, the fund's assets are down to around $400 million and it's losing nearly 29 percent this year through May 30.

"It's been extremely humbling," MacKay admitted. "We're in this dead man's zone."

Still, investors don't need to rush out and sell a fund that has loser status on Wall Street. In fact, current returns are much less important than other factors. The top priority is you need a veteran manager at the helm. Low expenses are also key. And be careful to look at the long-term record over three to five years.

You should also look for a fund that beats the average for its category -- a sure sign that a manager is weathering times better than his competitors. Sometimes, a fund will lag its peers for a good reason. For example, a manager may be holding onto a struggling stock that he believes is a solid long-term bet. If your fund is a category loser -- like some of these funds -- make sure you know why.

Red Oak is a lovable loser for several reasons. For one, MacKay is a veteran stock picker with a buy-and-hold philosophy. The fund is also cheaper than most tech names -- an expense ratio of 0.98 percent, about half the average cost for a tech fund. The fund is riskier than other tech names because it has a "focused" strategy of holding only 25 names. But it's a good choice to get your dose of tech if you're an aggressive investor.

Besides Red Oak, there are plenty of other loser funds that you can love. Take RS Diversified Growth, for example. The fund is down 19.3 percent and is in the 91st percentile of its small growth category -- giving it true loser status. But manager John Wallace has been at the helm for five years, and the fund's five-year record of 17.1 percent puts it in the top 10 percent. Wallace has also generated a strong track record with Oppenheimer Main St. Growth & Income, according to Morningstar.

Like many funds that suffer when their investing style goes out of favor, RS Diversified Growth is more a victim of the growth-value tilt, according to Sheldon Jacob, editor of the investing newsletter No-Load Investor. When growth comes back in vogue, the fund will look appealing once again.

Other worthy dogs, according to Jacob, include Value Line Leveraged Growth. The large growth fund makes big sector bets and has a good long-term record with a lower-than-average expense ratio, according to Morningstar. It has earned an average of 13 percent over 10 years, with an expense ratio around 1 percent.

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There are also some solid losers that are closed to new investors now. But they're worth keeping an eye on because funds do reopen from time to time. And you may have access to them through a 401(k). These include Weitz Hickory, a mid-cap value fund, and Brazos Micro Cap, a small growth fund.

Weitz Hickory, managed by Rick Lawson for nearly 10 years, is down 2 percent this year. It's been struggling since 2000, but in the previous five years was near the top of its category. It owns about 30 stocks and focuses on a few key sectors, such as services and financials, according to Morningstar.

Brazos, which chases the smallest and fastest-growing companies, is down about 13 percent this year, putting it behind most of its peers. But it has earned about 18 percent over the past three years, Morningstar said.

For MacKay, the questions he gets most often are "When will tech turn around?" and "What have you learned from the bear market?" Oak Associates is a small family of funds that also includes White Oak Growth and Pin Oak Aggressive Stock.

MacKay said he's given up trying to figure out why the market is up or down on a given day. But he is hopeful the sector will stabilize by the end of this year and come out of its slump by 2003. He's hung onto battered telecom-equipment stocks such as Juniper Networks and Ciena, though they're both trading at 52-week lows and hammered his fund last year.

"As people get more optimistic and more bullish on the economy, our fund will do very well," he said.