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U.S. Stock Funds Cool in February

After galloping out of the gate in the first month of the new year, U.S. stock funds cooled down considerably in February, Standard & Poor's announced yesterday. In its review of mutual fund performance for February, Standard & Poor's notes that in addition to high energy prices and geopolitical tensions in oil-rich Iran and Nigeria, investors appear to be concerned over the direction the Federal Reserve Board will take on interest rates in March when Chairman Ben Bernanke holds his first meeting later in the month. All mutual fund style categories, as defined by Standard & Poor's, were essentially flat in February, with domestic stock funds returning -0.46% on average for the month. Large-cap value funds held up best in February, edging up 0.15% for the month, while mid-cap growth funds showed the worst returns, falling 0.95%. Year-to-date, however, returns of U.S. stock funds continue to impress. The average domestic equity fund has gained 4.27% through the end of February, while small-cap growth funds have climbed 7.78%, topping all style categories. The large-cap S&P 500-stock index rose just 0.27% in February, but remains up 2.93% through the first two months of 2006. More details, including a table of fund investment style returns, can be found in the full press release.