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- U.S. equities all saw big gains this week, with the Dow Jones Industrial Average, S&P 500 and NASDAQ Composite hitting all-time highs.
- The best-performing fund so far for 2017 continues to be the Neuberger Berman Greater China Eq Instl (NCEIX).
- U.S. small value 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 rallied this week, as the Dow Jones Industrial Average increased 1.76% to close at an all-time high of 22,775. The S&P 500 also had an increase of 1.67% for the week, closing at a new high of 2,552. The NASDAQ Composite Index had the week’s largest gains of all the major indices, up 2.04%, to close at a new high of 6,585. The NASDAQ is still the best-performing major index on a year-to-date basis, up 22.33%.
The financial sector was this week’s top-performing area, up 2.28%. The sector is composed of big banks like JPMorgan Chase & Co. (NYSE: JPM), which was up 1.46% for the week. Financials have also been performing well year-to-date and for the trailing one year, up 14.71% and 36.80%, respectively.
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International Equities – International markets were a mixed bag this week, with the MSCI Developed Index remaining flat to remain at 1,974. The MSCI Emerging Index had an increase of 1.96% for the week and remains the best-performing index on a year-to-date basis, up 30.65%. Japan’s Nikkei 225 had its fourth week of gains in a row, up 1.30%, to close at 20,691.
Commodities – The commodity sector was mostly negative with the exception of copper this week. Crude oil saw a decline after having four weeks of gains. Oil was down $0.77 per barrel and closed at $50.79 per barrel. The price of gold decreased $16 per troy ounce, to close at $1,270. Copper saw an increase of $0.07, to close at $3.05.
Be sure to read important tips on how to invest in the right commodity-based mutual fund.
Taxable Bonds – Treasury yields keep gaining, as bond prices continue to fall. The 2-year Treasury increased 2 bps to yield 1.50%. The 10-year Treasury yield increased 2 bps, while the 30-year Treasury yield increased 3 bps to 2.89%.
Municipal Bonds – Municipal yields also gained across all maturities this week, with the exception of the 30-year. The 2-year AAA-rated bonds saw an increase of 2 bps to yield 1.04%. The 10-year AAA-rated bonds increased 3 bps, while the 30-year AAA-rated bond remained flat and continues to yield 2.90%. Municipal bond funds saw outflows of $212 million, breaking an inflow trend of five weeks. The largest credit spread for the five-year securities decreased by 1 bps to settle at 56 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 October 6, 2017.
|Category||Top Subcategory||1-Month Subcategory Return (%) *||Top Subcategory Performer||Ticker||1-Month Fund Return (%)||Performance Rationale|
U.S. Equity Fund
|Small Value||8.19%||CM Advisors Small Cap Value||CMOVX||15.19%||The largest holding is DMC Global Inc. (NASDAQ:BOOM), which is up over 33% for the month.|
|Japan Stock||4.09%||Hennessy Japan Small Cap Institutional||HJSIX||4.31%||The largest holding is HITO-Communications Inc (TYO:3654), which is up over 28% YTD.|
|Broad Basket||-1.49%||ALPS|CorCmdty Mgmt CompleteCmdty Strat I||JCRIX||0.54%||With oil decreasing this week, this bond was protected by staying invested in Treasuries and cash.|
|High Yield Bonds||0.72%||Fairholme Focused Income||FOCIX||2.02%||With bond yields increasing this week causing most bond prices to fall, high-yield bonds managed to register modest gains.|
|Muni National Short||-0.24%||Eaton Vance Floating-Rate Muni Inc I||EILMX||0.18%||The fund invests in floating rate municipal issues that are less sensitive to interest rate movements.|
Performance Snapshot: Top Fund
The fund’s largest holding is in Tencent Holdings Ltd (HKG:0700), which is up over 85% on a year-to-date basis.
The following table provides the top-performing mutual funds on a YTD basis as of October 6, 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||53.25%||1.76%||51.80%||$131||Financial Services|
Morgan Stanley Inst International Opp IS
|MNOPX||Foreign Large Cap Growth Equities||46.32%||5.64%||46.60%||$329||Consumer Defense|
Matthews China Small Companies
Baillie Gifford EAFE 5
|BGEVX||Foreign Large Growth||43.03%||0.46%||43.20%||$2,880||Consumer Cyclical|
T. Rowe Price Global Technology
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