Energy Funds Beat Tech as Markets Struggled This Quarter
Stock and bond funds posted broad losses last quarter, with energy the rare bright spot amid Middle East conflict.
Mutual fund and exchange-traded fund investors had few places to hide last quarter, as losses spread across most stock and bond categories. The broad retreat marked a sharp contrast with recent quarters dominated by technology-driven gains, according to a New York Times analysis of fund performance data.
Energy funds stood out as one of the quarter's clearest winners, buoyed by a surge in oil prices tied to the war involving Iran. Geopolitical conflict in a major oil-producing region historically sends energy equities higher as traders price in potential supply disruptions, and this quarter proved no exception.
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The reversal underscores how quickly market leadership can rotate. Technology stocks, which powered fund returns through much of the recent bull market, gave way to a sector tied directly to commodity prices and global security concerns. Investors who concentrated in growth-oriented funds bore the brunt of the downturn.
Bond funds, often viewed as a buffer during equity selloffs, also delivered negative returns for the period, leaving balanced-portfolio investors with limited protection. The simultaneous decline in stocks and bonds echoed dynamics seen in 2022, when rising interest rates punished both asset classes at once.
The quarter's results serve as a reminder that diversification across sectors — including unloved areas like energy — can matter significantly during periods of market stress. Continue reading at NYT > Business.
