Equity funds finally had to struggle

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, at the end of the third quarter, stock prices fell.

Ultimately, the average US equity fund fell 1% quarterly, down 4% in September, according to Refinitiv Lipper data. This has reduced year-to-date progress to 14.5%. International equity funds fell 1.8% in the quarter after falling 3.8% in September, with year-to-date profits remaining at 7.1%.

Fundflow data show that investors continue to invest heavily in fixed income comfort, while placing little confidence in the continued profits of US equities. Investors estimated a net investment of $ 8.9 billion in US equity and exchange-traded funds and $ 59 billion in international equity funds this quarter, according to estimates by the Investment Company Institute. However, they continued to invest more in fixed income funds. Net value for the quarter was $ 129.1 billion.

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

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

Fixed income funds related to medium-term investment grade bonds (the most common type of fixed income funds) rose only 0.01% in the quarter, leaving a 1.1% decrease 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 up 27.9% over the past year. The ever-changing gold-oriented fund fell 12.3% in the first quarter, including 8.9% in September, and fell 17% over the past year.

Power is a feature editor of The Wall Street Journal in South Brunswick, NJ. Please email william.power@

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Equity funds finally had to struggle

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