In November 2006, Teehan+Lax invested $50,000 in ten companies that are solid innovators for user experience and design. One year later, in 2007, the fund was up 39.3%. It’s a great story of how design helps companies outperform (the UX Fund handily beat S&P 500, NYSE, DOW, and NASDAQ).

Now almost two years later, we see that design isn’t immune to the vagaries of the market. The ten stocks chosen are now collectively down 22.37% from 2006 as of this writing, with Apple, Nike, and RIM the only three to stay up compared to 2006. But even those three are losing value as the markets slide, compared to their 52 week highs.

With an afternoon rally today on American markets, we see that loss lessening to only 19% in the time I’ve been writing this post. That loss is less than the indices over the same time, making the UX Fund still a better investment than index funds. However, while design and innovation can buffer loss, it’s certainly not immune to the bigger issues of markets, credit, and investor trends.