Hogging the spotlight in 2015, with an average return of 86%, facebook, Inc. (FB), Amazon.com, Inc. (AMZN), Netflix, Inc. (NFLX) and Alphabet Inc. (GOOGL) – more popularly the FANG stocks – have lost their edge this year. Facebook, Amazon, Netflix and Alphabet have lost 3.5%, 27.4%, 22.7% and 9.2%, respectively, in the year-to-date frame. In fact, the downtrend in these stocks has played a crucial role in dragging the Nasdaq, which is by structure tech heavy, deep into the red.

The underwhelming performance of the FANG stocks has naturally taken a significant toll on the technology mutual fund category, which has plunged 16% so far this year.

And since chances of any near-term recovery are bleak, it is perhaps better to avoid technology mutual funds that carry a Zacks Mutual Fund Rank #4 (Sell) or #5 (Strong Sell), as these can be hit harder by the sector's weakness.

What Made FANG Bleed?

Primarily, inflated valuations following last year's strong gains have made FANG stocks unpopular among investors amid the ongoing market slump that has stemmed from the China slowdown, relentless oil slump and Fed uncertainty.

Despite the massive fall so far this year, the price-to-earnings ratios (P/E) of these stocks are significantly higher than their respective industry averages. Alphabet, Facebook, Amazon and Netflix currently have P/E ratios of 25.17, 42.11, 104.60 and 270.57, respectively.

The FANG components are clearly struggling to perform with no respite on the horizon. To top it all, fourth-quarter earnings from Amazon failed to impress investors. In spite of favorable year-over-year comparison, the company's earnings missed the Zacks Consensus Estimate. While Facebook saw the sharpest spike ever after surpassing earnings and revenue estimates, mixed results from Netflix acted as a spoiler. Then again, Alphabet became the world's most valuable company in terms of market capitalization albeit for a short period of time. The short-lived glory failed to have any significant impact on its investors.