NEW YORK — After delivering solid and consistent returns through the first half of this year, most types of mutual funds faltered in the third quarter. It wasn’t a disaster — most of the declines were modest, and the largest categories of stock and bond funds were virtually flat — but it was a letdown for anyone who got accustomed to steady and widespread quarterly gains.
Of the 105 mutual fund categories that Morningstar tracks, 76 fell from July through September. Here’s a look at the trends that moved the markets:
• Small-cap stock funds had some of the biggest drops. The third quarter marked a return to earth for funds that specialize in stocks of smaller companies. Funds investing in a mix of small-cap growth and value stocks fell an average 6.8 percent. Last year, those same funds returned 37.4 percent.
• Large-cap stock funds treaded water. Large-cap blend funds own a mix of the biggest companies, such as Apple, Exxon Mobil and Google, and were virtually unchanged over the quarter. They ticked lower by an average of 0.1 percent, a big step down from the 6.4 percent return that they delivered in the first half of the year.
• Most bond funds had a muted quarter. The mutual funds that form the core of most investors’ bond portfolios lost an average 0.1 percent.
• Some specialized stock funds remained healthy. Indian stock funds were stars. Health care stock funds were also winners, returning an average 4.6 percent.
• Gold-related funds were the quarter’s biggest losers.
