Market sectors helping to boost monthly performance for funds were information technology, energy, consumer discretionary, and materials, which all posted strong gains. Positive earnings surprises helped propel stocks across the board, marking the thirteenth straight quarter of double-digit (year-over-year) operating gains for the S&P 500.
“Buoyed by 71% of the 500 issues beating their estimates, the expected 8% earnings gain for the S&P 500 quickly grew to 10.7%, and should reach 12% by the end of period,” says Howard Silverblatt, Market Equity Analyst at Standard & Poor’s. He adds that double-digit gains are expected in the third and fourth quarters of 2005, permitting “companies to feel more comfortable about dedicating resources to operations.” Standard & Poor’s Investment Policy Committee currently forecasts that the S&P 500 Index will close the year at 1270.
During the month, Federal Reserve Chairman Alan Greenspan said he looked forward to sustained economic growth ahead, and stated that the Fed must “continue to remove monetary accommodation,” indicating that measured rate hikes will continue. Greenspan said inflation pressures are expected to remain “contained,” but cited higher oil prices, geopolitical tensions, low long-term rates, and the housing “froth” as risks for the outlook.
Also during the month, Beijing announced it would no longer peg the yuan to the U.S. dollar, an arrangement that had been in place since 1994. China now ties the yuan to a basket of currencies instead. The revaluation is likely to trim the U.S. trade gap with China in the longer term, as the increased cost of imported goods eventually reduces demand. In the short run, however, the U.S. trade gap may actually widen, as the cost of goods will rise more rapidly than the attempt to secure less-expensive substitutes.
Below is a list of the best- and worst-performing domestic equity funds by style category for July 2005.
Fund Investment Style |
Average Returns July 2005 (%) |
Average Returns YTD (%) |
Large-Cap Growth |
+4.49 |
+2.85 |
Large-Cap Value |
+3.26 |
+3.56 |
Large-Cap Blend |
+3.68 |
+2.89 |
Mid-Cap Growth |
+5.50 |
+5.77 |
Mid-Cap Value |
+4.68 |
+7.13 |
Mid-Cap Blend |
+4.82 |
+6.89 |
Small-Cap Growth |
+6.01 |
+4.50 |
Small-Cap Value |
+5.74 |
+6.30 |
Small-Cap Blend |
+5.45 |
+5.37 |
All-Cap Growth |
+4.97 |
+3.75 |
All-Cap Value |
+3.87 |
+4.24 |
Domestic Equity Funds* |
+4.55 |
+4.24 |
S&P 500-Stock Index |
+3.60 |
+2.88 |
Domestic Equity Funds* — July 2005 Returns
|
Best Individual Performer |
Returns (%) |
Worst Individual Performer |
Returns (%) |
Large-Cap Growth |
ProFunds:UltraOTC/Inv (UOPIX) |
+15.03 |
ProFunds:UltraShort OTC/Svc (USPSX) |
-13.32 |
Large-Cap Value |
American Growth Fund/A (AMRAX) |
+9.09 |
American Heritage Growth Fund (AHEGX) |
+0.00 |
Large-Cap Blend |
PMFM Tactical Opportunities Port Trust/Inv (ETFTX) |
+7.52 |
ProFunds:UltraBear/Svc (URPSX) |
-6.84 |
Mid-Cap Growth |
TCW Galileo Growth Equities Fund/I (TGGEX) |
+10.3 |
Ameritor Investment Fund (AIVTX) |
+0.00 |
Mid-Cap Value |
CGM Capital Development Fund (LOMCX) |
+8.83 |
Brown Advisory Value Equity/Instl (BIAVX) |
+1.61 |
Mid-Cap Blend |
ProFunds:UltraMid Cap/Inv (UMPIX) |
+10.26 |
ProFunds:UltraShort Mid Cap/Svc (UIPSX) |
-9.57 |
Small-Cap Growth |
Kopp Emerging Growth Fund/Instl (KEGIX) |
+11.23 |
Van Wagoner Post-Venture Fund (VWPVX) |
-0.40 |
Small-Cap Value |
Pacific Advisors:Small Cap Fund/A (PASMX) |
+9.87 |
Westport Select Cap Fund/R (WPSRX) |
+1.80 |
Small-Cap Blend |
ProFunds:UltraSmall Cap/Inv (UAPIX) |
+12.65 |
Potomac Small Cap/Short/Investor (POSSX) |
-11.83 |
All-Cap Growth |
Bridgeway Fund:Aggressive Investors/2 (BRAIX) |
+9.51 |
SunAmerica Focused Multi Cap Growth/C (SSACX) |
+1.55 |
All-Cap Value |
Legg Mason Opportunity Trust/Instl (LMNOX) |
+9.11 |
Neuberger Berman Focus/Advisor (NBFAX) |
+0.99 |
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