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Exchange-traded funds

Market Turbulence Amidst Global Uncertainty: A Rise and Fall of Investor Returns

Strategic Insights

— 1 min read

Amidst the turbulent backdrop of domestic and global news, the third quarter presented an astonishing performance for investors. The US stock market experienced a significant surge, with nearly every major asset class rising substantially between July and September. Stocks, bonds, and commodities all saw gains, leaving many investors with impressive returns. However, as the market reached new highs, concerns about an A.I. bubble, shifting global dynamics, and internal market issues began to arise, casting doubt on the sustainability of these gains.

Key Takeaways:

  • The average domestic general stock fund in the US rose 6.2% for the quarter, bringing the average stock's 12-month return to 11.9%.
  • Internationally, stock funds averaged a 6.6% gain for the quarter, with a 12-month return of 16.8%.
  • Actively managed funds tend to lag the markets, with index funds outperforming them in the last quarter, including the Vanguard Total Stock Market E.T.F.
  • Bond fund returns were positive but unexceptional, with the average taxable fund returning 2.2% for the quarter and 5% over 12 months.
  • Technology, balanced, and target-date funds saw impressive returns, with technology stock funds up 13.2% for the quarter and 30.6% for 12 months.
  • Precious metal and cryptocurrency funds outperformed the market, with the Profunds Precious Metals UltraSector returning 75% for the quarter and 150% for 12 months.
  • The iShares Bitcoin Trust E.T.F. returned just 6.2% for the quarter but 80% for 12 months, according to FactSet.

Statistics:

  • The S&P 500 stock index returned 8.1% for the quarter, while the Russell 2000, which tracks smaller stocks, returned 12.4% including dividends.
  • The Vanguard Total Stock Market E.T.F. rose 8.3% for the quarter, outperforming the average general domestic stock fund.
  • Bond fund returns were as follows:

+ Average taxable fund: 2.2% for the quarter, 5% over 12 months.

+ Municipal bond funds: 2.7% for the quarter, 1.2% over 12 months.

  • Technology stock funds: 13.2% for the quarter, 30.6% for 12 months.
  • Precious metal stock funds: 41% for the quarter, 92.6% for 12 months.
  • The iShares Bitcoin Trust E.T.F.: 6.2% for the quarter, 80% for 12 months.

Sources:

  • The New York Times, October [no date]
  • Morningstar
  • FactSet
  • Nationwide
  • Profunds
  • U.S. Global Investors
  • Franklin Templeton
  • iShares

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