Equity funds posted their third-consecutive quarter of plus-side returns, gaining 5.14 percent in the first quarter of 2011, reports Tom Roseen, a senior analyst with Lipper. For Q1 2011, 73 of Lipper’s 79 equity-fund classifications posted positive returns, he adds. For the second-consecutive quarter, U.S. diversified-equity funds (up 6.04 percent) outpaced sector-equity funds (which rose 5.67 percent), mixed-equity funds (up 3.66 percent) and world-equity funds (that ticked up 2.60 percent).
In fixed income, headline risk kept most bond fund groups in the black at the end of the first quarter, notes Jeff Tjornehoj, head of Lipper Americas Research. Long-term Treasury and some, but not all, municipal-debt fund groups were the quarter’s worst performers, he explains, badly trailing riskier high yield and flexible income strategies.
As for fund flows, investors turned their focus to equity mutual funds, and that group ended the first quarter of 2011 with net inflows of $57 billion, according to Matthew Lemieux, a Lipper research analyst. “This was quite a turnaround from the $12.1 billion in outflows posted the previous quarter,” he says. Taxable fixed income also did well, adding $36.2 billion in flows, bolstered by heavy interest in both loan-participation funds (with inflows of $14.4 billion) and multi-sector income funds ($8.1 billion).
In January, equity funds gained 1.15 percent, with 84 percent of equity and mixed- equity funds posting positive returns, according to Lipper research. The Dow moved up 2.72 percent and Nasdaq gained 1.78 percent, and the markets produced their eighth-consecutive week of upside performance. The month’s leaders in early 2011 included natural-resource funds, up 5.15 percent. Gold funds dropped 10.78 percent, however.
In February, equity funds moved up 3.13 percent, with 94 percent of all equity and mixed-equity funds expanding their returns. The Dow and Nasdaq improved roughly 3 percent. “Despite disappointing non-farm payroll news, Libya’s civil war and China’s 50 basis point rise in reserve requirements, investors remained upbeat,” Roseen shares.
The month’s developments also encompassed the resignation of Mubarak in Egypt and a rise in M&A deals. Gold funds gained 10 percent, in the face of political unrest, while natural resource funds moved up 6 percent.
In March, which included the tragic earthquake, tsunami and nuclear reactor problems in Japan, equity funds had a nearly 1 percent rise, with 71 percent of equity and mixed-equity funds in the black. Emerging-market funds rose 5 percent.