Stock and bond funds' double-digit 2-year returns
By Dian Vujovich
Stepping back when looking at the mutual fund financial landscape shows a much different picture than day-to-day snapshots produce.
For a change, I’ve looked at the performance of stock and bond funds– and all types of combos inbetween, used Lipper data to get a feel for how these investment products have rewarded shareholders over the past couple of years.
Lipper data, btw, is available at http://www.allaboutfunds.com . It’s a site I publish, and the only one I know of on the Web that offers a wide variety of Lipper fund performance data on a weekly basis that’s free of charge and available to all site visitors with no sign in or sign up required. It, if I don’t say so myself, offers info and data you won’t find elsewhere.
Okay, enough of my pitch, here are some details:
•Looking back 2 years
For the week ending Nov.11, and beginning on Nov. 13, 2008, you’ll find that the average U.S. diversified equity fund had moved up 20.3 percent; the average sector fund, up 25.5 percent; and the average world equity fund up 26.8 percent.
In the mixed equity fund category, (under that heading reside target-date funds, convertible securities funds, flexible portfolios and basically any fund that may invest in both equities and fixed-income), the average fund was up 17.6 percent.
What may be surprising to some is that fixed-income funds have had a heck of a two-year run, as well. For instance, domestic long-term fixed-income funds were up 13.7 percent and world income funds up 16.2 percent.
While the average ultra-short obligation fund only gained 2.60 over the past 24 months, the average short/intermediate U.S. Government & Treasury fund was up over 7 percent, and the average investment grade fund up 10.5 percent.
Bond fund investors have also seen some wonderful performance numbers on general domestic taxable funds; the average total return was up 17.8 percent.
And the reason for all of those wonderful total returns has been due to falling interest rates. Crazy as that may sound to some, when interest rates go down, the price on bonds goes up.
• As for today
It’s P-Uee in the bond market today. Over the past month the average fund in all taxable fixed-income funds was a negative returns of 0.76.
As sensible investors all know, one of these days interest rates are going to start trending upwards and continue in that direction. While no one knows exactly when, that’s one of the few guarantees anyone who has been in the financial arena for any amount of time knows is a truism.
Today, fixed-income investors wanting more than a puny return might want to investigate high-yield bond funds, flexible income funds, multi-sector table funds and corporate debt BBB rated funds. These funds, lest you’ve forgotten, are professionally managed just as stock funds are. As with any fund Investment, however, before handing over your money make sure to understand what you’re buying and why.
Then there are stock funds. The average return on diversified funds was up 2.5 percent over the past month and more than 20 percent over the past 52-weeks. I’m hoping that upward trend continues.
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