Top 5 Mutual Fund Sectors In 2015

While most of the major mutual fund sectors struggled to finish 2015 in green amid concerns stemming from China-led global growth worries and slump in oil prices, some succeeded to come out with flying colors. The strong rebound in the fourth quarter, after declining trend till the third quarter, primarily boosted these funds.

The Dow and the S&P 500 posted their worst yearly performances since 2008, and cash flows were also on the discouraging side. Mutual funds witnessed huge cash outflows in 2015, which hit record highs for multiple times. While US-focused mutual fund categories failed to register double-digit gains in 2015, only the Japan Stock category registered growth.

Mutual funds started the year 2015 on a positive note with 87% of funds finishing in the green in the first quarter. But their performance deteriorated in the second quarter, when only 41% of funds succeeded to register gains. Then, performance in the third quarter was the worst in four years. While only 17% of mutual funds finished in the green in the quarter, the Bear Market funds category, which bet against the market uptrend, emerged as the top gainer in both August and September, adding 9.1% and 4.2%, respectively. However, mutual funds recovered significantly in the fourth quarter, which also included October – the best month in four years.

Meanwhile, foreign mutual funds including those focused on acquiring Japanese stocks outperformed domestic mutual funds last year. In such a scenario, we present the top 10 mutual fund categories in 2015:

Mutual Fund Category

2015 Return (%)

Japan Stock

11.97

Health

8.05

Foreign Small/Mid Growth

7.04

Technology

5.21

Consumer Defensive

4.15

High Yield Muni

4.09

Foreign Small/Mid Blend

3.79

Muni California Long

3.72

Large Growth

3.6

Preferred Stock

3.18

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