October 5, 2022

Equity Funds Post Their Third Consecutive Quarterly Loss, Declining 5.89% for Q3 2022

by Tom Roseen.

After the third consecutive 75-basis-point interest rate hike, rising inflationary concerns, growing fears of a recession, a steadfast commitment by the Federal Reserve to tame inflation, and a nascent European energy crisis related to Russia’s war in Ukraine, equity and fixed income securities once again suffered sharp declines during the quarter, with equity mutual funds posting their worst September returns since 2011.

For Q3 2022, the average equity fund suffered a 5.89% loss—bringing the year-to-date beatdown to a disappointing 23.47% decline. Refinitiv Lipper’s U.S. Alternative Funds macro-classification (-0.81%) outpaced or mitigated losses better than the other six major equity groups for the second consecutive quarter. For September, the average equity fund declined 8.72%—its largest monthly loss since March 2020.

For the quarter, only six of Lipper’s 104 equity and mixed-assets fund classifications posted positive returns. In total, only 6.44% of all individual equity and mixed-assets funds posted plus-side returns for the quarter.

In this segment, I highlight the third quarter and September performance results for equity mutual funds and ETFs.

Summary:

  • For Q3 2022, equity funds (-5.89% on average) posted their third consecutive quarterly loss.
  • Lipper’s Alternative Equity Funds macro-classification (-0.81%) mitigated losses better than the other six broad-based equity groups, followed by USDE Funds (-4.47%) and Sector Equity Funds (-5.03%).
  • Dedicated Short Bias Funds (+6.45%) posted the strongest return in the equity universe for Q3.
  • China Region Funds chalked up the largest losses in the equity universe, declining 21.44% for the quarter.
  • The average equity fund is down 23.47% year to date, after suffering its largest September decline since 2011.

Click here or the Download Full Report link in the upper right-hand column of this page to download the Third Quarter 2022 FundMarket Insight Report: Equity Funds Post Their Third Consecutive Quarterly Loss, Declining 5.89% for Q3 2022.

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