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The Second Quarter in U.S. Stock Funds: Settling Down

After two volatile quarters, domestic stock funds took a breather.

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The U.S. equity market settled down in the second quarter of 2019 after several months of wild swings. In 2018’s second half, the S&P 500 benchmark flirted with bear-market territory. Dragged down by big losses in energy and other economically sensitive stocks, it fell 19.4% between Sept. 21 and Dec. 24. Then in the first quarter of 2019, the market snapped back sharply, as the S&P 500 gained 14% and many of the same stocks posted the biggest gains. For the most part things have been much calmer over the past three months, with the S&P 500 gaining 3.7% from April 1 through June 27, and the other market indexes having similarly modest returns.

In keeping with this relatively calm environment, mutual fund returns across Morningstar Categories were tightly bunched, with no dramatic gains or losses. Among equity categories, only precious-metal funds and Latin America stock funds gained more than 5% for the quarter through June 27, and only energy funds lost more than 5%. The best-performing of the nine Morningstar Style Box categories was mid-cap growth, with a 4.6% gain, and the worst performer was small-value, with a 0.7% loss.

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David Kathman does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.