Domestic stock funds rallied in November to post their best month this year, Investor’s Business Daily reports.

Domestic diversified equity funds increased 5.27% in November, according to Lipper, signaling a pause in the year-long stretch of debilitating regulatory challenges and difficult political climate that sent investors scurrying for cover.

Small-cap value emerged as the top-performing sector last month by delighting investors with an average 8.29% return. The large-cap growth sector brought down average growth figures for stock funds by posting average 4.21 returns.

The Dow Jones Industrial Average increased 4% last month, while the Standard & Poor’s 500 Index climbed by 3.87%. But the strongest gains appeared in the Nasdaq and S&P 600, which respectively increased by 6.17% and 8.46%. Fund managers like Paul Gulden of the Pax World Growth Fund say they are heartened by November’s rally but stop short of predicting a long-term run-up in stock prices.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.