Equity funds finally had to struggle

Texas News Today

Now the fund investor is being tested.

During the summer, stocks continued to break records, allowing investors to pour money into both their equity and fixed income portfolios. However, stock prices declined at the end of the third quarter.

Ultimately, the average U.S. equity fund fell 1% quarterly, compared with a 4% drop in September, according to data from Refinitiv Lipper. It has slashed year-over-year progress to 14.5%. International equity funds fell 1.8% in the quarter after falling 3.8% in September, with year-on-year profits remaining at 7.1%.

Fundflow figures show that investors continue to invest heavily in fixed-income comforts, with little confidence in the continued profitability of US equities. Investors projected net investments in US equities and exchange-traded funds and $59 billion in international equity funds for the quarter, according to estimates from the Investment Company Institute. However, he continued to invest more in fixed income funds. Net worth for the quarter was $129.1 billion.

As the economy recovers from a pandemic and blockade, the Federal Reserve Board is suggesting next year it could reverse stimulus and raise interest rates.

“Most fixed income investors aren’t sure how to prepare for the end of a 40-year bull market for fixed income,” Tom Rosen, head of research services at Refinitiv Ripper, said in a recent report. “Recently, fixed income investors have benefited from lower interest rates and lower relative inflation, and both capital gains and income distributions have contributed to the total return of fixed income funds, which is probably in danger of change. is on.”

Fixed income funds dealing with medium-term investment grade bonds (the most common type of fixed income fund) grew only 0.01% in the quarter, down 1.1% so far this year.

There were no strong third quarter fund categories. Financial services funds were a rare and well-performing ripper category, up nearly 3% and 27.9% over the previous year. The gold-oriented fund fell 12.3% in the first quarter, including 8.9% in September, and fell 17% over the previous year.

Powers is the features editor for The Wall Street Journal in South Brunswick, NJ. Please email [email protected]

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