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- U.S. and international equities all saw gains this week, with the exception of the NASDAQ Composite.
- The best-performing fund so far for 2017 continues to be the Neuberger Berman Greater China Eq Instl (NCEIX).
- Latin America Equities is the best-performing mutual fund subcategory based on the rolling month.
- Make sure to check out the previous edition of the Weekly Roundup to keep track of changing trends in the mutual funds space.
U.S. Equities – U.S. equity markets all saw gains with the exception of the NASDAQ. The Dow Jones Industrial Average increased 0.36% to close at an all-time high of 22,350. The S&P 500 also had a slight increase of 0.08% for the week, closing at 2,502. The NASDAQ Composite Index decreased 0.33%, to close at 6,427. The NASDAQ is still the best-performing major index on a year-to-date basis, up 19.39%.
The telecom sector was this week’s top-performing area for the second week in a row, up 3.80%. The sector is composed of companies like AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ), which were up 4.54% and 3.75%, respectively, during the week. However, the sector is still negative for the year, down 5.14%.
Explore our Mutual Fund Education section to learn more about important mutual fund concepts.
International Equities – International markets all saw positive gains, with the MSCI Developed Index increasing 0.70% to close at 1,978. The MSCI Emerging Index had a gain of 0.03% for the week and remains the best-performing index on a year-to-date basis, up 30.51%. Japan’s Nikkei 225 had two weeks of gains in a row, up 1.94% to close at 20,296.
Commodities – The commodity sector was a mixed bag this week, with crude oil gaining for the third week in a row, up $0.77 per barrel and closing at $50.66 per barrel. The price of gold decreased $27 per troy ounce to close at $1,293. Copper remained unchanged to close at $2.94.
Be sure to read our important tips on how to invest in the right commodity-based mutual fund.
Taxable Bonds – Treasury yields saw increases again this week. The 2-year Treasury increased 5 bps to yield 1.43%, which is its highest yielded since 2008. The 10-year Treasury yield increased 5 bps, while the 30-year Treasury yield moved up 1 bps to 2.78%.
Municipal Bonds – Municipal yields also gained across all maturities this week. The 2-year AAA-rated bonds increased 3 bps to yield 0.90%. The 10-year AAA-rated bonds increased 5 bps, while the 30-year AAA-rated bond gained 4 bps and now yields 2.83%. Municipal bond funds saw inflows of $547 million for the fourth week in a row. The largest credit spread for the five-year securities decreased by 4 bps to settle at 58 bps for the week.
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 one-month return generated as of September 22, 2017.
|Category||Top Subcategory||MTD Subcategory Return (%)*||Top Subcategory Performer||Top Subcategory Performer||MTD Fund Return (%)||Performance Rationale|
U.S. Equity Fund
|Small Growth||3.21%||Baron Discovery Retail||BDFFX||6.99%||The fund has over 41% invested in technology, which is up over 26% YTD.|
|Latin America Equities||11.14%||Deutsche Latin America Equity S||SLAFX||4.3%||The fund invests in Latin American companies. For example, its largest holding, Raia Drogasil SA (BVMF:RADL3), is up almost 5% over the last month.|
|Broad Basket||3.62%||PIMCO CommoditiesPLUS® Strategy Instl||PCLIX||1.36%||WIth oil prices increasing, the fund had a portion of its holdings invested in oil.|
|Emerging Markets Bonds||2.87%||Goldman Sachs Local Emerg Mkts Dbt Instl||GIMDX||1.51%||With bond yields increasing this week causing most bond prices to fall, emerging markets bonds managed to see the biggest gains.|
|High Yield Muni||0.74%||Goldman Sachs High Yield Muni Instl||GHYIX||0.21%||With muni bonds yields increasing, high yield bonds saw marginal gains.|
*1-month subcategory returns reflect rolling month returns as of September 15, 2017.
Performance Snapshot: Top Fund
The fund’s largest holding is in Tencent Holdings Ltd (HKG:0700), which is up over 82% on a year-to-date basis.
The following table provides the top-performing mutual funds on a YTD basis as of September 22, 2017. Only those funds that are rated five stars by Morningstar and that generated YTD returns greater than or equal to that achieved by the S&P 500 are included.
|Name||Ticker||Category||YTD %||Net Expense Ratio||% of Assets in Top 10 Holdings||Total Assets $ (Millions)||Top Sector Invested|
Neuberger Berman Greater China Eq Instl
|NCEIX||China Equities||50.93%||1.76%||51.8%||$ 131||Financial Services|
Morgan Stanley Inst International Opp IS
|MNOPX||Foreign Large Cap Growth Equities||45.98%||5.64%||46.6%||$ 329||Consumer Defense|
Matthews China Small Companies
|MCSMX||China Equities||43.48%||2.24%||35.7%||$ 24||Technology|
Baillie Gifford EAFE 5
|BGEVX||Foreign Large Growth||43.00%||0.46%||43.2%||$ 2,880||Consumer Cyclical|
American Century Emerging Markets R6
|AEDMX||Emerging Markets Equities||41.28%||1.28%||30.3%||$ 1,160||Technology|
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