Due to tensions in the Middle East, skyrocketing oil and gas prices and inflationary concerns, the third quarter started off sluggish. Equity funds in July returned a negative 1.1%, but as the Federal Open Market Committee began to ease up on interest rate hikes and oil prices declined 7% in August, in the end, domestic equity funds posted gains of 1.98%, Lipper's third quarter mutual fund review and outlook found.

The report highlighted that investors are still cautious and income-orientated, preferring higher-quality earnings and dividends, and have been shifting to favor large-cap funds from small-cap funds.

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