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About-Face for Aggressive Growth Mutual Funds

Last year’s winning mutual funds have borne the brunt of this year’s sell-off.

Aggressive growth mutual funds led the way in 2015, gaining 6.5%. Results were driven by the so-called FANGs (Facebook, Amazon, Netflix and Google). These high P/E stocks experienced strong gains as investors sought companies that could grow earnings in the face of an uneven economic backdrop.2.29.16

This year, economic worries have sent stocks lower. Without valuation support, high P/E stocks are among the worst-performing areas of the market. Aggressive growth mutual funds are down more than 10%.

It’s a pattern that repeats often: yesterdays market winners become tomorrow’s losers, and vice versa. Indeed, many dividend-oriented mutual funds struggled in 2015, but are among the markets best performing areas this year.

Timeless takeaways for the thoughtful investor:

  • The fear of “missing out” can lead to bad decisions, including chasing yesterday’s winners.
  • Valuation ultimately matters, although it is not a reliable timing indicator.



DISCLAIMER: Past performance does not predict future results. This report is based on data obtained from sources we believe to be reliable. Hefren-Tillotson does not, nor any other party, guarantee the accuracy or completeness of this report or make any warranties regarding results obtained from its usage. All opinions and estimates included in this report constitute the firms judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation to buy or sell the securities herein mentioned.
Investment Advisory Team

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Hefren-Tillotson Inc. is a leading diversified financial services firm providing investment and retirement plan management and comprehensive, financial planning through MASTERPLAN® for individuals and businesses. The firm’s wealth management services are administered by Certified Financial Planner (CFP) professionals, Chartered Financial Analyst (CFA) Charter holders, attorneys, Chartered Life Underwriters, and CPA/PFS’s. Hefren-Tillotson offers corporate services including 401(k) retirement planning, executive financial counseling, fiduciary reviews and workplace financial planning seminars. Founded in 1948, the firm is headquartered in Pittsburgh and has offices located in Pittsburgh, Butler, Greensburg, North Hills, and South Hills.