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Equity Funds Up 7% in Q4’13

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Last year was certainly a good one for the markets, with the Dow Jones up 26.5% and the NASDAQ’s 38.32% boost. Overseas, Japan’s Nikkei 225 price-only index posted a 38.81% return.

As Lipper reported at year end, equity funds posted their sixth-consecutive quarter of positive returns, despite the Federal Reserve’s tapering announcement, in the fourth quarter. During the period, equity funds improved 7.08% on average, and 85 of Lipper’s 95 equity and mixed-equity fund classifications posted positive returns.

U.S. diversified equity funds rose 8.76% in the fourth quarter, while world equity funds improved 5.55%. Mixed-asset funds rose 4.57%, and sector equity funds gained 3.40%. On the down side, precious-metals equity funds dropped 13.90%), dedicated short-bias funds declined 12.36%, and commodities/precious-metals funds sank 7.98%.

Though they had negative returns for the year (–11.08%), India Region Funds soared by 13.66% in the final three months of 2013. European region funds recorded gains of 8.31% in the fourth quarter.

For the first quarter in five, large-cap funds improved 10.15%, while multi-cap funds posted a Q4 return of 9.39%. Lipper says there was “no clear winner” in the style groups, with value-oriented funds rising 9.49%, growth-oriented funds 9.40% and core-oriented funds 9.31%. Large-cap growth funds soared 10.73%, helped by the strong performance and heavy weighting in the information technology, consumer discretionary and health care sectors.

Lipper’s preliminary Q4 2013 data also shows that investors were net purchasers of fund assets during the period. They added about $40.8 billion to the conventional funds business (excluding ETFs) and about $154 billion for the full-year 2013. Non-U.S. equity funds attracted $31.5 billion versus $8 billion for domestic funds in the final three months of the year.

Investors were net purchasers of large amounts of conventional equity funds ($39.3 billion) and money market funds ($39.5 billion) in the fourth quarter but were net redeemers of taxable fixed income funds (–$20.2 billion) and muni bond funds (–$17.9 billion).


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