Slammed by rising interest rates and global turmoil, markets were resilient in the third quarter. Nevertheless, fund investors are in line for a win. For the quarter, S&P 500-focused funds posted an average total return of 2.2%. But overall U.S.-stock mutual funds and ETFs fell an average 2.4%, to trim their year-to-date gain to 10.3%, according to LSEG statistics. International-stock funds were down an average 0.4% for the quarter, to trim the year-to-date return to 10.1%.
The jump in interest rates, and slowdown in the tech-stock bullet train, has put many investors on edge. Highflying stocks like those tied to artificial intelligence “may be vulnerable to a selloff if investors decide they’d rather take advantage of the currently elevated risk-free rates” that Treasurys represent, said Saira Malik, chief investment officer at Nuveen. Bond funds were hammered in the quarter. Funds focused on investment-grade debt posted a negative total return of 3.7%, to put the year-to-date gain at 3.0%.
Investors continued to show faith in the stock market in the third quarter, but placed even more faith in the relative comfort of bond funds. Based on Investment Company Institute estimates, investors added a net $4.3 billion to U.S.-stock funds and $15.7 billion to international-stock funds. However, that paled in comparison to bond funds, where investors put a net $175.0 billion into bond-focused funds.
A look back at Wall Street Journal headlines from this month in history: 15 years ago, Steve Jobs died in October 2011. After co-founding Apple in 1976 and being ousted in 1985, he founded NeXT and Pixar. He returned to Apple in 1997, launching iMacs, iPod, iPhone, and iPad, making Apple the most valuable company in the world.
Source: Wall Street Journal Markets · Summarized by HeadlinesBriefing