Stock funds posted their best return since 1999 in the 2nd quarter as the market rallied

• In the second quarter of 2020, equity funds posted their best quarterly performance since the fourth quarter of 1999, according to data from Refinitiv Lipper.
• The average equity fund returned 20.22% in the quarter, and Lipper's US Diversified Equity Funds macro-classification returned 23.52%, outperforming six other major equity groups.
• US investors pushed the funds to the blockbuster performance "as they cheered economic reopenings, the Federal Reserve Board's 'whatever it takes' mantra, and improvements in the U.S. unemployment rate," wrote Tom Roseen, head of Lipper's Research Services, in a note.
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Stock funds are partying like it's 1999.

In the second quarter of 2020, equity funds posted their best quarterly performance since the fourth quarter of 1999, according to data from Refinitiv Lipper. The average equity fund returned 20.22% in the quarter, and Lipper's US Diversified Equity Funds macro-classification returned 23.52%, outperforming six other major equity groups and posting its best quarterly performance since at least 1979.

US investors pushed the funds to the blockbuster performance "as they cheered economic reopenings, the Federal Reserve Board's 'whatever it takes' mantra, and improvements in the U.S. unemployment rate," wrote Tom Roseen, head of Lipper's Research Services, in a note.

US markets also surged in the second quarter as positive economic data outweighed climbing new case numbers. The Dow Jones industrial average gained 18% in the three-month period from April through June, the index's best quarterly return since 1987.

Meanwhile, the S&P 500 saw its best gain since 1998 during the period, while the Nasdaq capped off its best quarter since 2001.

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Investors embraced risky assets during the quarter, according to Roseen. The USDE Funds macro-classification was supported by strong quarterly performances in equity leverage funds, which gained more than 43%, and small-cap growth funds, which returned nearly 33% in the three-month stretch.

It was a solid quarter all around, with 98 of Lipper's 103 equity and mixed-equity classifications posting positive returns.