All fund risk and return metrics, ratings, and analytics were uploaded to MFO Premium today, 31 October, Halloween 2022. We used Lipper’s Friday data drop to get an early peek … and today markets seemed tame enough, so numbers should be pretty close to month’s end.
October was a decent one for equity funds, especially value. The Dow was up an extraordinary 14%. But still not enough to get back above water. Well, unless you consider Berkshire Hathaway (BRKA) a mutual fund, which many savvy investors do … it’s up 4-5% year-to-date (YTD). The Dow: -8%.
Here’s a quick summary, YTD, showing retractions of some key equity indexes from MultiSearch/PreSet Screens/Reference Indexes, worst on top:
On the fixed-income side, it’s been the worst year ever for bond funds. Few bond funds today existed 40 years ago, which nominally marks the beginning of the (now finished) bond bull market; therefore, most investors have never experienced anything like the retractions this year in bond funds. For perspective, the popular BlackRock iShares Core US Aggregate Bond ETF (AGG) was launched 19 years ago.
Today, of 109 core bond mutual funds and ETFs that are at least 10 years old, 106 have experienced their worst calendar year returns ever … significantly worse. Below are some notable examples. (Those highlighted in blue are MFO Great Owls, which means they are as good as it gets.)
BlackRock iShares 20+ Year Treasury Bond ETF (TLT) is down 33%. As is Vanguard Long-Term Treasury Inv (VUSTX). Both are down 40% from their highs 27 months ago. Dan Ivascyn’s Allianz PIMCO Income Inst (PIMIX) is down -11% … twice as bad as its 2008 retraction.
Bottomline: The Great Normalization continues … with the current bear now in its 10th month.
If there is a silver lining, bond yields are finally going up.
We will update ratings this weekend with the final month-ending October data.