Third Quarter in U.S. Stock Funds: Steady as She Goes

After a volatile first half in which growth stocks posted double-digit gains while energy stocks suffered big losses, U.S. stocks settled down in 2017’s third quarter. With the U.S. economy slowly chugging along, corporate earnings producing few major surprises, and oil prices on the rise after sinking in the year’s first half, the major stock indexes all produced modest single-digit gains for the quarter, with the S&P 500 hitting new all-time highs. Although there was plenty of news, including devastation from hurricanes and continued political turmoil in Washington, D.C., the markets mostly shrugged it off.

This relative steadiness extended across the universe of domestic-stock funds. All nine sections of the Morningstar Style Box had average gains of between 2.8% and 5.1% for the quarter through Sept. 28, tightly clustered around the S&P 500’s 4% return over the same period. Returns for sector funds were a bit more dispersed, but not by much; the worst performers were real estate and consumer defensive funds, which were roughly flat for the quarter, while energy, natural resources, and technology funds gained more than 7% on average.

Individual U.S. stock funds showed a similarly narrow range of results in the third quarter. Out of the 460 funds in the nine Morningstar Style Box sections that have a Morningstar Analyst Rating, none gained more than 10% for the quarter through Sept. 28, and only a handful lost money. Even so, there were some definite winners and losers among individual funds. Here are some of the more prominent ones.

Winners

Small-value

Silver-rated

Gold-rated

Losers

The recent performance of Neutral-rated

Bronze-rated

Silver-rated

Finally, Neutral-rated

More Market Outlooks

Stock Market Outlook: China Rebalancing Presents Winners and Losers

Credit Market Insights: A Solid Quarter for the Bond Markets

Basic Materials: Valuations Propped Up by Shaky China Fundamentals

Communication Services: Smaller Rivals Call the Shots in U.S. Wireless

Consumer Cyclical: Tepid Mall Traffic Could Constrain the All-Important Holiday Season

Consumer Defensive: Valuations More Reasonable After Third-Quarter Retreat

Energy: All Roads Point to Oversupply in 2018

Financial Services: Banks Can't Rest Easy

Healthcare: Stock Selection Key as Valuations Rise

Industrials: Worldwide Growth Is Resilient, But Valuations Look Full

Real Estate: Enter With Caution

Technology: Valuations Painting Overly Rosy Scenarios

Utilities: Valuations Still Running Out of Control

M&A Outlook: High Prices Impede Dealmaking in the U.S.

Private Equity Outlook: Larger Funds, Larger Deals

Venture Capital Outlook: Exits Come Into Focus as Valuations Continue to Climb

International-Stock Funds: The Beat Goes on

Bond Funds: A Period of Relative Calm