MutualFunds.com provides weekly information (January 2-January 9) about any material impact on the mutual funds industry due to major economic and corporate events around the world. In addition, performance statistics on the top funds and fund categories are also provided.
- U.S. markets rebounded for the week, as NASDAQ hit new all-time high.
- International markets were also up big for the week, as global economies continue to strengthen.
- The best performing fund for 2017 so far is the Invesco Gold & Precious Metals Investor (FGLDX), which invests in gold and precious metal mining companies.
- Make sure to check out the previous edition of the Weekly Roundup to get the whole picture.
U.S. Equity – U.S. equities finished the first week of 2017 on a positive note, with the Dow Jones Industrials Average (DJIA) increasing 0.73% for the week at 19,964. The S&P 500 was up 1.23% for the week and reached 2,277. The NASDAQ was the best performing index, up 1.64% for the week at 5,521, which was a new all-time high. This provides evidence of investor confidence in the equity markets.
The real estate sector was the best performing sector, up 3.05%. This recent uptrend is a continuation of the positive new home sales data that was released a few weeks ago. In case you are wondering how to get exposure to the real estate space, you might want to explore mutual funds that invest in the real estate sector.
International Equity – Most international markets were up, with the MSCI Developed Index increasing 1.78% for the week as well as the MSCI Emerging Index up 2.20%. Japan’s NIKKEI Index bounced back from last week and had a positive return of 1.61% for the week. Both the U.S. and international equity markets were up, showing that the strength of the U.S. economy is positively influencing the global markets.
Commodities – The commodity sector was up for the week, with oil up $0.22 per barrel, or 0.40%, and closing at $53.99 per barrel. The price of gold continued its positive trend for the second week in a row and was up $16 per troy ounce. Copper had a big uptick for the week, up $0.06 per pound or 2.38%.
Be sure to check our important tips on how to invest in the right commodity-based mutual fund.
Taxable Bonds – The Treasury bond market had little movement for the week, with the 2-year Treasury yield increasing 1 bps to 1.21%. The 10-year and 30-year Treasuries went down by 3 bps and 5 bps, respectively. Now that the Fed has finally raised interest rates, become familiar with how to rebalance your portfolio based on interest rate hikes.
Municipal Bonds – Along with long-term Treasuries, municipal bond yields also decreased across the board.
Both the 2-year AAA-rated and the 10-year AAA-rated municipal bond yields decreased 1 bps and 3 bps, respectively, from the week before. The 30-year AAA-rated municipal bond yield showed no movement from the week before. Municipal fund flows continued the massive outflow trend for the seventh straight week, with over $1.52 billion for the week. This is primarily the result of the recent rate hike by the Fed and uncertainty over future rate hikes.
Performance Snapshot: Top Fund Category
The following table provides a list of the top-performing mutual fund subcategories for the previous week within the broader categories of industry. In each of those subcategories, we have listed the top mutual funds based on month-to-date (MTD) fund return generated as of January 6, 2017.
|Category||Top Subcategory||MTD Subcategory Return (%)||Top Subcategory Performer||MTD Fund Return (%)||Performance Rationale|
|U.S. Equity Fund||Large Growth||3.06%||FOCKX||5.64%||Fund has heavy exposure to technology and healthcare, which are the two best performing sectors of the year.|
|International Equity||Latin American Stock||5.51%||SLAFX||5.89%||The Latin American sector is the best performing international sector and this fund specializes in this area.|
|Commodities||Broad Basket||-0.08%||PCPSX||2.20%||Fund is heavily invested in cash right now, so when the energy sector pulled back, this fund was unaffected.|
|Taxable Bonds||Emerging Market Bonds||2.07%||FEMGX||3.69%||Fund invests in emerging market bonds. The emerging markets are up over 2% year-to-date (YTD), while global interest rates declined over the last few weeks.|
|Municipal Bonds||Muni California Long||1.44%||NCHAX||2.54%||With bond yield declining over the past week, high-yield bonds witnessed larger gains.|
Performance Snapshot: Top Fund
This fund is heavily invested in gold mining companies, with the top holding Torex Gold Resources (TXG) up over 28% for the year.
The following table provides the top-performing mutual funds on a YTD basis, as of January 6, 2017. Only those funds that are rated 5 stars by Morningstar and that generated YTD return greater than that achieved by the S&P 500 are included.
|Top-Performing Fund||Ticker||Category||YTD Return (%)||Net Expense Ratio (%)||% of Assets in Top 5 Holdings||Net Assets $ (Millions)||Top Sector Invested|
|Invesco Gold & Precious Metals Investor||FGLDX||Precious Metals||8.17%||1.54%||23.62%||$289||Basic Materials|
|US Global Investors Gld & Prec Mtls||USERX||Precious Metals||6.53%||2.13%||37.71%||$91||Basic Materials|
|First Eagle Gold l||FEGOX||Precious Metals||5.39%||2.14%||40.79%||$1,100||Basic Materials|
|T. Rowe Price Global Technology||PRGTX||Global Equities||4.77%||0.91%||31.67%||$3,250||Technology|
|Edgewood Growth Instl||EGFIX||Large Growth||4.14%||1.09%||31.67%||$6,550||Financial Services|
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