Despite rising inflation and recessionary concerns during Q4, investors initially drove up stock prices on rumors that the Federal Reserve might pivot to a more dovish monetary policy sooner than expected, driving equity mutual funds to their strongest quarterly returns since Q4 2020—with the average equity fund posting a handsome 8.77% gain. For the quarter, Refinitiv Lipper’s U.S. World Equity Fund macro-classification (+12.85%) outpaced the other six major equity groups for the first quarter in nine.
Nonetheless, with the Fed signaling its terminal rate could peak at 5.25% next year—up from 4.75% in September—investors took some of those hard-won gains off the table in December, with the average equity fund losing 4.07% for the month—its poorest showing since September 2022. Equity funds (-16.82%) chalked up their worst one-year return, on average, since 2008.
For the quarter, 100 of Lipper’s 104 equity and mixed-assets fund classifications posted positive returns. In total, 94.16% of all individual equity and mixed-assets funds posted plus-side returns for Q4.
In this segment, I highlight the fourth quarter and December performance results for equity mutual funds and ETFs.
Summary:
- For Q4 2022, equity funds (+8.77% on average) posted their first quarterly gain in four.
- Lipper’s World Equity Funds macro-classification (+12.85%) outpaced the other six broad-based equity groups, followed by USDE Funds (+8.10%) and World Sector Equity Funds (+8.06%).
- Commodities Base Metals Funds (+20.45%) posted the strongest return in the equity universe for Q4.
- Dedicated Short Bias Funds chalked up the largest losses in the equity universe, declining 13.14% for the quarter.
- For 2022, the average equity fund declined 16.82%, posting its worst calendar-year return since 2008.
Click here or the Download Full Report link in the upper right-hand column of this page to download the Fourth Quarter 2022 FundMarket Insight Report: Equity Funds Post Their First Quarterly Gain in Four, Climbing 8.77% for Q4 2022.
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