Energy stock funds rose as most stock and bond funds fell last quarter

In short: A New York Times column reports that energy stock funds were a rare bright spot last quarter, while most stock and bond fund categories lost money.

What's going on

A New York Times investing column says the war involving Iran helped push energy prices higher, and that shaped how many mutual funds and similar funds performed for the quarter. Think of fund categories like “baskets” of investments, grouped by what they mainly hold.

Using figures cited from Morningstar, the column reports that the average U.S. energy stock fund gained 11.6% for the quarter. By contrast, the average domestic stock fund fell 1.8%. International stock funds fell 0.6% on average.

Bonds also had a tough quarter in the column’s accounting. Taxable bond funds lost 2.2% on average, and U.S. municipal bond funds, which are often seen as more conservative because they are issued by states and cities, fell 5.6% on average.

The column links energy funds’ gains to higher prices for oil, natural gas, gasoline, and other energy products during the conflict. It also says the conflict contributed to rising interest rates, which tends to hurt bond prices and can make investors nervous.

What to watch

These numbers are averages for fund categories, not what every fund or investor earned. They also describe one quarter only, and should not be treated as a prediction of what comes next. If energy prices and interest rates keep moving, different parts of the market could continue to rise or fall for similar reasons.

Source: NYTimes