The major U.S. equity indexes are down about 35 percent or more through October 23, reports Lipper, after declining 11 percent or more in the first three quarters of 2008.
What has that meant for bear funds? Some ProShares and Direxion equity funds focusing on China, real estate, precious metals and emerging markets, for instance, are up by a range of 45 percent to 127 percent. In the week ending October 23, these same funds rose by 22 percent or more.
Overall, according to Lipper, dedicated short-bias funds have risen 64 percent year to date. General U.S. Treasury funds are up 5.12 percent. In contrast, gold-oriented funds have declined 58 percent, and emerging-market funds about 59 percent.
Pimco’s Total Return Institutional bond fund has a flat performance for the year through October 23; for the past 12 months, it has risen about 2 percent. According to the latest Lipper research, this bond fund includes about $78.6 billion of assets.
American Funds Growth Fund of America, with assets of $71.3 billion, is down about 38 percent. Fidelity’s Contrafund, with $61.8 billion in assets, has declined 37 percent.
Lipper’s fixed-income mutual fund data show that some categories are in positive territory for the third quarter and year-to-date 2008. Several of these fixed-income categories are general U.S. government fixed, GNMA (for Government National Mortgage Association or Ginnie Mae) and intermediate U.S. government. Over a 10-year period, these categories have returns of roughly 4 percent.
The third week of October sent many investors toward money-market funds, says EPFR Global. Emerging-market equity funds, meanwhile, lost around a tenth of their value. Fund flows during the week were generally negative.
Overall, only five of the 24 major equity, fixed-income and sector fund groups tracked by EPFR Global managed to post inflows. However, for the second week in a row, outflows were generally modest. For U.S. equity funds, outflows in that period represented just 0.19 percent of assets under management as risk-adverse investors largely stayed put. Funds managed for growth outperformed their value counterparts across all capitalizations, although the latter fared better in flow terms.