After a brutal end to 2008, the first five months of 2009 — especially the 13 weeks from February 5 to May 7 — have been kind to U.S. and international equities, which is good news for the mutual fund industry.
Most major U.S. equity indexes entered positive territory in the past four-plus months, with the exception of the Dow Jones Industrial Average, which was down 4.18 percent for the year through May 7. The Nasdaq Composite jumped 8.83 percent, though, and the NYSE rose 0.75 percent during the same period.
From early February through early May, the Nasdaq index ticked up nearly 11 percent, NYSE grew 8.9 percent and the S&P 500 gained 7.3 percent. And in March, the Russell 2000 improved 8.93 percent, but is still down nearly 15 percent for the year.
Several of the largest mutual funds can now boast about being in positive territory. American Funds’ Growth Fund of America has improved 8.79 percent through May 7, according to Lipper data, while the Dodge & Cox Stock Fund is up 3.65 percent. The Dodge & Cox International Stock Fund has gained 9.50 percent year to date, the Fidelity Contrafund has improved 2.1 percent, and the Vanguard Wellington Fund gained 1.75 percent.
“We often talk about the Wellington Fund as the embodiment of investment principles: balance, diversification, low costs [and] a focus on the long-term,” explains Vanguard CEO and President William McNabb at the May 6 opening of the 2009 ICI General Membership Meeting in Washington, D.C. “But it serves as an equally powerful metaphor for the success of our industry, and it echoes our theme here today: extraordinary times, and a steadfast commitment to helping investors reach their financial goals through prudently managed funds.”