Equity Funds Up 16.6% in 2010 on Big Q4 Gains

Lipper data shows that this fund group improved about 10.5% in the fourth quarter

For 2010, equity funds ended the year up more 16.57% on average, according to Lipper data released Jan. 7. These funds moved up a whopping 33.73% in 2009, after dropping -39.54% in 2008.

Popular equity funds had a good year, as well. The Vanguard Total Stock Fund (VTSMX, VTI), for instance, was up 17.09% in 2010, and the Fidelity Contrafund (FCNTX) improved 16.93%.

The Pimco Total Return Fund gained 8.86% last year, while American Funds Growth ticked up 12.29%.

In the fourth quarter of 2010, equity funds improved 10.45% on average. This follows a 12.52% jump in the third quarter, a drop of -10.42% in the second quarter, and an uptick of 4.64% in the first quarter, Lipper data shows.

These funds gained 3.73% in October, dropped -0.01% in November and ticked up 6.43% in December – for the best December performance since 1999, according to Lipper senior analyst Tom Roseen.

Q4 2010

U.S.-focused equity funds have improved 11.41% in the fourth, including small-cap growth funds, which have added more than 16% in the final three months of 2010.

Vanguard Total Stock gained 11.66% in the period, while the Fidelity Contrafund jumped 9.45%, according to Lipper.

In addition, world equity funds ticked up 7.83% in the fourth quarter and 13.67% for the year. Within this broad category, Japan funds top the list with a fourth-quarter gain of more than 12.73%.

Sector funds rose 10.69% in the quarter and more than 19% in 2010. Natural-resources funds were up 21.16% for the quarter and 21.30% for the year, while precious-metals funds grew 14.56% and 43.57% respectively.

Funds focused on U.S. financial services gained 11.53% in the fourth quarter and 11.85% for 2010, while global financial-service funds improved 6.67% in the final months of 2010 and 10.72% for the full year.

In 2011, Roseen suggests that quality earnings could continue, along with an improving economy. 

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