Equity Funds Post Their Best Quarterly Returns Since 2020 for Q4 2023

Despite inflationary concerns, rising interest rates, and wars in Ukraine and the Middle East, increased expectations that the Federal Reserve Board’s rate hikes are nearing an end pushed equity mutual funds and ETFs to their fourth quarterly gain in five—with the average equity fund (+10.26%) posting its largest quarterly gain since Q4 2020 in Q4 2023.

For the first quarter in 17, the World Sector Equity Funds macro-classification (+12.84%) outpaced Lipper’s other six broad-based equity groupings. U.S. Diversified Equity (USDE) Funds (+11.83%) took the runner-up position for the quarter, followed by Sector Equity Funds (+11.44%), World Equity Funds (+9.65%), Mixed-Assets Funds (+9.08%), Alternative Equity Funds (+0.59%), and Commodities Funds (-2.23%).

For the quarter, 95 of Lipper’s 104 equity and mixed-assets fund classifications posted positive returns. In total, 96.10% of all individual equity and mixed-assets funds posted plus-side returns for the quarter.

For 2023, the average equity fund (+17.29%) posted its strongest one-year return since 2019, with the USDE Funds (+21.12%) macro-group chalking up the strongest return, followed by Sector Equity Funds (+17.13%), World Equity Funds (+15.38%), World Sector Equity Funds (+14.64%), Mixed-Assets Funds (+14.12%), Alternative Equity Funds (+2.22%), and Commodities Funds (-3.20%).

In this segment, I highlight the fourth quarter 2023, December, and one-year performance results for conventional equity mutual funds and ETFs.

Summary:

• For Q4 2023, equity funds (+10.26% on average) posted their fourth quarterly gain in five.
• Lipper’s World Sector Equity Funds macro-classification (+12.84%) outpaced the other six broad-based equity groups, followed by USDE Funds (+11.83%) and Domestic Sector Equity Funds (+11.44%).
• Equity Leverage Funds (+22.16%) posted the strongest return in the equity universe for Q4.
• Dedicated Short Bias Funds chalked up the largest losses in the equity universe, declining 15.73% for the quarter.
• For 2023, the average equity fund rose 17.29%.

Click here or the Download Full Report link in the upper right-hand column of this page to download the Fourth Quarter 2023 Equity FundMarket Insight Report: Equity Funds Post Their Best Quarterly Returns Since 2020 for Q4 2023.