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The Most Popular and Most Shunned Funds of 2010

Date: Tuesday, June 15, 2010
Author: Morningstar

Investors might have been hoping for more calm in the equity markets in 2010 after a steep decline in 2008 and early 2009, followed by a huge rally. But it's been yet another turbulent year for stocks so far. Equities dropped a bit early on, then staged a rally led by much of the same cyclical fare that soared in 2009 before staging a sharp reversal when the government-debt situation turned out to be more dire than feared. Because we're already nearing the first-half point in 2010 and the market averages have been all over the place, we decided to take a closer look at the funds investors have been flocking to and those they've been fleeing. (See my colleague Karen Dolan's piece on dollar-weighted returns and the costs of chasing performance.) We included bond funds, too--although bond markets generally haven't seen a repeat of the turbulence of 2008-09, bond funds' flows are clearly affected by investors' sentiments about stock funds.