Equity Funds Post Fourth Consecutive Quarterly Gain in Q1, with an Average 6.31% Return

U.S. investors pushed equity funds to their fourth consecutive quarter of plus-side performance in Q1 2021 as they focused on the $1.9 trillion stimulus package signed into law by President Joe Biden in late March, improving COVID-19 vaccine distributions, and broadening of the market rally to include cyclical and out-of-favor issues. For Q1 2021, the average equity fund posted a 6.31% return, with Lipper’s Sector Equity Funds macro-classification (+8.94%) outpacing the other six major equity groups for the first quarter in eight.

For the one-year period ended March 31, 2021, the average equity fund was up an eye-popping 61.39%, with U.S. Diversified Equity Funds (+72.48%) leading the way, while Alternative Funds (+9.02%) was the relative laggard, dragged down by Dedicated Short Bias Funds (-61.75%).

In this segment, I highlight the first quarter and March 2021 performance results for equity mutual funds and ETFs.

Summary:

• For Q1 2021, equity funds (+6.31% on average) posted their fourth straight quarter of plus-side returns.
• Lipper’s Sector Equity Funds macro-classification (+8.94%) outperformed the other six broad-based equity groups, followed by USDE Funds (+8.49%) and Commodities Funds (+6.29%).
• The Domestic Sector Equity Funds and Global Sector Equity Funds macro-classifications housed three of the five best performing classifications in the equity universe for Q1, with Natural Resources Funds (+25.25%) posting the strongest return of the group.
• The USDE Funds macro-classification was propped up by strong quarterly performance from Small-Cap Value Funds (+22.12%), the second-best quarterly returns in the equity universe.
• For the one-year period ended March 31, 2021, the average equity fund rose 61.39%, with Equity Leverage Funds posting a whopping 164.60% return.