MutualFunds.com provides weekly information (Jan. 23-Jan. 27) 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.
- Dow Jones Industrial Index (DJIA) breaks historic 20,000 mark as all equity markets gain.
- The best-performing fund for 2017 so far is the Invesco Gold & Precious Metals Investor (FGLDX).
- Latin American equity is the best month-to-date performing mutual fund subcategory.
- Make sure to check out the previous edition of the Weekly Roundup to get the whole picture.
U.S. Equity – U.S. equity markets gained for the week, with the DJIA increasing 1.34% for the week to a new record high of 20,094. The S&P 500 gained 1.03% for the week, reaching 2,295. Among the major indices, NASDAQ was up the most for the week, increasing 1.90% for the week to 5,661 and up 5.16% year-to-date. The surpassing of the 20,000 level for the DJIA is considered an important psychological mark for investors and could be interpreted as the end of the bull market cycle.
The materials sector was the week’s best performing individual sector, up 3.44% for the week and the 6.42% year-to-date. It is one of the sectors that could benefit from President Trump’s plans to increase the nation’s infrastructure spending.
International Equity – International markets also gained for the week, with the MSCI Developed Index gaining 1.30% for the week and the MSCI Emerging Index gaining 2.55%. Like the rest of the markets, Japan’s NIKKEI also gained, up 1.72% for the week.
Commodities – The commodity sector was relatively stable, with oil increasing $0.75 per barrel, or 1.42%, and closing at $53.17 per barrel. The price of gold snapped its month-long gain and declined by $16 per troy ounce. However, copper increased $0.06 per pound, or 2.26%.
Be sure to check our important tips on how to invest in the right commodity-based mutual fund.
Taxable Bonds – Treasury bond yields increased for the week, with the 2-year Treasury yields increasing 3 bps. Both the 10-year and 30-year Treasuries remained stable compared to the week before.
Now that the Fed has finally raised interest rates, it’s a good time to become familiar with how to rebalance your portfolio based on interest rate hikes. You can also read about essential tax tips for mutual funds so that you are aware of some key strategies to limit your tax burden.
Municipal Bonds – Like treasuries, municipal yields also increased, with the AAA-rated 2-year municipal yields rising 1 bps to 1.13%. The 10-year and 30-year AAA-rated municipals both increased their yields by 3 bps and 5 bps, respectively, from the week prior. Municipal fund flows showed a third consecutive week of inflows, with a $154 million increase of assets.
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 the industry. In each of these subcategories, we have listed the top mutual funds based on the month-to-date (MTD) fund return generated as of January 27, 2017.
|Category||Top Subcategory||MTD Subcategory Return (%)||Top Subcategory Performer||Ticker||MTD Fund Return (%)||Performance Rationale|
|U.S. Equity Fund||Large Growth||2.95%||Transamerica Capital Growth I||TFOIX||9.24%||Fund has large exposure to technology companies, like Facebook Inc. (FB) that is up more than 14% YTD.|
|International Equity||Latin American Stock||12.67%||BlackRock Latin America Instl||MALTX||13.84%||The Latin American sector is the best-performing international sector, and this fund specializes in this area.|
|Commodities||Broad Basket||1.10%||AQR Risk-Balanced Commodities Strat R6||QRCRX||6.08%||Fund has high exposure to gold, is up more than 4% for the month despite declining over the last week.|
|Taxable Bonds||Preferred Stock||1.93%||Destra Flaherty & Crumrine Pref & Inc I||DPIIX||2.48%||With interest rates relatively stable, higher yielding investments have gained over the last month.|
|Municipal Bonds||High Yield Munis||0.93%||Dreyfus High Yield Municipal Bond A||DHYAX||2.00%||High yield is the best-forming municipal sector, with investors looking to maximize yield.|
Performance Snapshot: Top Fund
This fund is heavily invested in gold mining companies, with the top holding Torex Gold Resources Inc (TXG) which is up more than 26% year-to-date.
The following table provides the top-performing mutual funds on a YTD basis, as of January 27, 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||12.81%||1.54%||23.62%||$289||Basic Materials|
|US Global Investors Gld & Prec Mtls||USERX||Precious Metals||12.50%||2.13%||37.71%||$91||Basic Materials|
|BlackRock Latin America I||MALTX||Latin America Equities||11.61%||1.33%||33.68%||$162||Financial Services|
|T. Rowe Price Global Technology||PRGTX||Global Equities||10.51%||0.91%||31.67%||$3,250||Technology|
|Columbia Seligman Global Technology R4||CCHRX||Technology Equities||8.67%||1.15%||29.69%||$729||Technology|
We provide this report on a weekly basis. To stay up to date with mutual fund market events, return to our News section.