9/22/22, 11:10 PM
U.S.-Stock Funds Are Down 17.3% So Far in 2022 - WSJ
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https://www.wsj.com/articles/u-s-stock-funds-down-17-3-in-2022-11662146408
MARKETSJOURNAL REPORTS: PERSONAL INVESTINGMONTHLY MONITOR
U.S.-Stock Funds Are Down 17.3% So Far in
2022
After a weak end to August, stock funds are unlikely to be able to close the year in
positive territory
By William Power
Updated Sept. 4, 2022 10:00 am ET
Fund investors might have to concede that 2022 will be forgettable.
The average U.S.-stock mutual fund or exchange-traded fund is down 17.3% for the year to
date, through August, according to Refinitiv Lipper data. That includes a 3.5% average decline
in August, reflecting the stock market’s reaction to Fed Chairman Jerome Powell’s comments
that the central bank will keep raising interest rates to fight inflation, despite recession risk.
The advice for fund investors is, of course, to maintain a long-term view. It is unlikely that the
stock market—and accordingly, the average stock fund—will be able to post a gain for all of
2022. Meantime, the market’s movements will be all about the Fed and inflation.
The S&P 500 and Dow Jones Industrial Average both fell just over 4% in August, mainly
because of the end-of-month declines tied to the Fed; the Nasdaq Composite Index fell closer
to 5%.
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U.S.-Stock Funds Are Down 17.3% So Far in 2022 - WSJ
“Inflation is a bit like the bogeyman from horror movies—persistent and resilient,” says Katie
Nixon, chief investment officer for Northern Trust Wealth Management. In her latest market
commentary, Ms. Nixon says that Mr. Powell’s comments affirmed her belief that the Fed will
likely stay aggressive into 2023, potentially raising its federal-funds rate by an additional 0.75
percentage point in the September meeting.
Scoreboard
August 2022 fund performance,
total return by fund type.
U.S.
stocks*
Intl.
stocks*
Bonds
(intmd.)
–3.5%
–5.3%
–2.6%
*Diversified funds only, excluding sector and
regional/country funds
Source: Refinitiv Lipper
“The current policy path is aimed squarely at fighting inflation,” says Ms. Nixon. “Collateral
but necessary damage will be done to the economy and potentially manifest as pain to
households and businesses.”
International-stock funds fell 5.3% during August, on average, to push their year-to-date
decline to 21.5%.
Bond funds also declined in August. Funds tied to intermediate-maturity, investment-grade
debt (the most common type of fixed-income fund) fell 2.6% and are down just over 11% for
2022 so far.
Mr. Power is a Wall Street Journal features editor in South Brunswick, N.J. Email him at
william.power@wsj.com.
Appeared in the September 6, 2022, print edition as 'Stock Funds Are Down 17.3% in 2022'.
Next in Journal Reports: Personal Investing
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U.S.-Stock Funds Are Down 17.3% So Far in 2022 - WSJ
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U.S.-Stock Funds Are Down 17.3% So Far in 2022 - WSJ
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