According to S&P, all mutual fund categories were essentially flat in February. Large-cap value funds held up best in February, edging up 0.15% for the month, while mid-cap growth funds showed the worst returns, falling 0.95%.
In its review of mutual fund performance for February, S&P notes that in addition to high energy prices and geopolitical tensions in oil-rich Iran and Nigeria, investors appear to be concerned over the direction the Federal Reserve Board will take on interest rates in March when Chairman Ben Bernanke holds his first meeting later in the month.
However, Sam Stovall, Standard & Poor’s chief investment strategist, notes that US stocks have historically performed poorly in February, reflecting a seasonal pattern.
Year-to-date returns of US stock funds are still impressive. The average domestic equity fund has gained 4.27% through the end of February, while small-cap growth funds have climbed 7.78%, topping all style categories. The large-cap S&P 500-stock index rose just 0.27% in February, but remains up 2.93% through the first two months of 2006.
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