Mutual funds post solid returns for year to date
Associated PressPublished April 1, 2006
Wall Street's first-quarter stock market rally led U.S. mutual funds to solid returns for the year to date, with smaller company stock funds posting double-digit returns. China international funds and gold funds performed above average.
According to mutual fund watcher Lipper, diversified U.S. stock funds, which have $3.5-trillion in assets, averaged a 6.67 percent return for the quarter. Small caps led the way, with aggressive smaller company funds posting average returns of 12.56 percent and conservative small-cap funds averaging a 10.56 percent return.
Despite five-year highs for the Dow Jones industrials during the quarter, large-cap growth funds had the slowest growth, averaging a 3.07 percent return.
"The large-cap stocks tend to be the ones that are most interest rate sensitive," said Bill Sickles, senior research analyst at Lipper. "With the changes at the Fed and figuring out if and when they'll stop raising rates, it's not a surprise to see large caps suffer some, while small caps are far less sensitive to rate issues."
Mutual funds focused on specific sectors, which command $250-billion in assets, posted an 8.06 percent average return. Real estate funds led the group, with average returns of 13.75 percent, followed by natural resources funds - including energy holdings - which had average returns of 11.88 percent.