The stock market and U.S. stock funds rose for the second consecutive month. However, It is understandable if fund investors do not feel giddy about the market. The numbers remain ugly for investors so far this year. The average U.S.-stock fund rose 5.3% in November, according to Refinitiv Lipper data, but is still sitting on a 13.8% decline in 2022. For all of 2021, U.S.-stock funds had rallied 22.5%. Inflation-battered markets, stocks, and bonds have virtually assured investors that the average stock or bond fund will be in the red for 2022. The Federal Reserve has been raising interest rates to battle inflation, despite the economic pain that it causes.

In particular, funds focused on growth stocks—those powered by corporate-earnings potential—are hurting. Large-cap growth funds are among the worst performers in 2022: down 26% this year after November’s 4.9% rise. Small-cap growth is down 22%. The hope is that the Fed’s aggressive moves are winding down. If inflation data cooperates, the 0.75 percentage-point increase in November “may be the last supersize hike,” says Katie Nixon, chief investment officer for Northern Trust Wealth Management. But smaller rate increases are still on the plate, including at the Fed’s policy meeting on Dec. 13-14. “Growth stocks have faced a headwind during this latest chapter of hawkish monetary policy being implemented by the Federal Reserve,” says Gerald B. Goldberg, chief executive officer of GYL Financial Synergies in West Hartford, Conn. “With that said, we are approaching a potential pivot in policy. When that occurs, you should anticipate a more constructive environment for growth names.”