Mutual Funds Weekly Roundup: December 22

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Mutual Funds Weekly Roundup: December 22

Coins Placed on Top of Each Other Simulating Growth
MutualFunds.com provides weekly information (December 13 – December 19) 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 continue to see new highs, with the Dow nearing the 20,000 mark.
  • Treasury yields surge to high levels with the Fed’s decision to raise interest rates by 25 bps.
  • Municipal bond funds continue outflows, with a decline of over $2 billion as the Fed raises rates.

Market Wrap-Up

U.S. Equity – U.S. equities remained positive for the week but slowed when compared to last week’s huge gains. The Dow Jones Industrial Average (DJIA) was up 1.21%, and closes out the week at another new record high of 19,852. The S&P 500 was up 0.71% to 2,262. The NASDAQ was also positive, with a weekly gain of 0.73% to 5,457. This week, the Fed announced an interest rate hike of 25 bps and equity markets maintained upward momentum by the expected announcement. U.S. Equity mutual funds continued their outflow trend with -$8.36 billion for the week, suggesting investors may be reallocating to low-cost investments (e.g. ETFs) or individual stocks.

Healthcare stocks were up the most last week, with a return of 2.67%. This was a bounce back from the decline of prior weeks, especially when President Trump indicated his plan to reduce drug prices during his term. The sector is one of two that are still down on a year-to-date (YTD) basis, at -1.82%. Given the performance of this sector, you might want to explore mutual funds that invest in the health and biotech sectors.

International Equity – Most international markets were down for the week, with the MSCI Developed Index declining 0.80% and the MSCI Emerging Index down 2.18%. However, Japan’s NIKKEI Index surged with a 2.71% return and made the year positive with a 1.26% return on YTD basis. This can be attributed to the weakening value of the yen compared to other global currencies.

Commodities – After last week’s huge gains, commodities had modest gains with oil increasing $0.06 per barrel or 0.12%. The price of gold continues to tumble, down $42/troy ounce or -3.66%, mostly because of the recent interest rate hike. Copper had a much more moderate decline, down $0.03/pound or -1.14%.

Be sure to check out important tips on how to invest in the right commodity-based mutual fund.

Taxable Bonds – With the Fed’s meeting on Wednesday, interest rates were raised 25 bps, causing the 2-year Treasury yield to reach the highest level since 2009. While the 2-year and 10-year Treasuries went up by 12 bps, the 30-year maturity went up by only 2 bps. Now that the Fed has finally raised interest rates, become familiarized on how to rebalance your portfolio based on interest rate hikes.

Municipal Bonds – Along with Treasuries, municipal bond prices also decreased, causing all yields to increase.

The 10-year AAA bond yield increased by 14 bps and the 30-year AAA bond yield increased 7 bps from the week before. Municipal fund flows continued the massive outflow trend for the fifth straight week, with over $2 billion for the week and over $8.5 billion over the last month. As the Fed announced a rise in interest rates this week, investors continue to be worried about future hikes and how it will negatively affect the bond market.

Performance Snapshot: Top Fund Category

The following table provides a list of the top performing subcategories for the previous week within the broader categories of the mutual fund industry. In each of those subcategories, we have listed out the top mutual funds based on month-to-date (MTD) fund return generated as of December 16, 2016.

Performance Snapshot: Top Fund

Top performing fund: Hodges Institutional (HDPIX)

This fund continues to be the top YTD performance fund for the third straight week, primarily by having nearly 13% invested in the energy sector, which is up over 28% for the year. The top holding is Texas Pacific Land Trust (TPL), which is up over 128% for the year.

The following table provides the top performing mutual funds on a YTD basis, as of December 16, 2016. 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.

We provide this report on a weekly basis. To stay up to date with mutual fund market events, return to our News page.

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Coins Placed on Top of Each Other Simulating Growth

Mutual Funds Weekly Roundup: December 22

MutualFunds.com provides weekly information (December 13 – December 19) 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 continue to see new highs, with the Dow nearing the 20,000 mark.
  • Treasury yields surge to high levels with the Fed’s decision to raise interest rates by 25 bps.
  • Municipal bond funds continue outflows, with a decline of over $2 billion as the Fed raises rates.

Market Wrap-Up

U.S. Equity – U.S. equities remained positive for the week but slowed when compared to last week’s huge gains. The Dow Jones Industrial Average (DJIA) was up 1.21%, and closes out the week at another new record high of 19,852. The S&P 500 was up 0.71% to 2,262. The NASDAQ was also positive, with a weekly gain of 0.73% to 5,457. This week, the Fed announced an interest rate hike of 25 bps and equity markets maintained upward momentum by the expected announcement. U.S. Equity mutual funds continued their outflow trend with -$8.36 billion for the week, suggesting investors may be reallocating to low-cost investments (e.g. ETFs) or individual stocks.

Healthcare stocks were up the most last week, with a return of 2.67%. This was a bounce back from the decline of prior weeks, especially when President Trump indicated his plan to reduce drug prices during his term. The sector is one of two that are still down on a year-to-date (YTD) basis, at -1.82%. Given the performance of this sector, you might want to explore mutual funds that invest in the health and biotech sectors.

International Equity – Most international markets were down for the week, with the MSCI Developed Index declining 0.80% and the MSCI Emerging Index down 2.18%. However, Japan’s NIKKEI Index surged with a 2.71% return and made the year positive with a 1.26% return on YTD basis. This can be attributed to the weakening value of the yen compared to other global currencies.

Commodities – After last week’s huge gains, commodities had modest gains with oil increasing $0.06 per barrel or 0.12%. The price of gold continues to tumble, down $42/troy ounce or -3.66%, mostly because of the recent interest rate hike. Copper had a much more moderate decline, down $0.03/pound or -1.14%.

Be sure to check out important tips on how to invest in the right commodity-based mutual fund.

Taxable Bonds – With the Fed’s meeting on Wednesday, interest rates were raised 25 bps, causing the 2-year Treasury yield to reach the highest level since 2009. While the 2-year and 10-year Treasuries went up by 12 bps, the 30-year maturity went up by only 2 bps. Now that the Fed has finally raised interest rates, become familiarized on how to rebalance your portfolio based on interest rate hikes.

Municipal Bonds – Along with Treasuries, municipal bond prices also decreased, causing all yields to increase.

The 10-year AAA bond yield increased by 14 bps and the 30-year AAA bond yield increased 7 bps from the week before. Municipal fund flows continued the massive outflow trend for the fifth straight week, with over $2 billion for the week and over $8.5 billion over the last month. As the Fed announced a rise in interest rates this week, investors continue to be worried about future hikes and how it will negatively affect the bond market.

Performance Snapshot: Top Fund Category

The following table provides a list of the top performing subcategories for the previous week within the broader categories of the mutual fund industry. In each of those subcategories, we have listed out the top mutual funds based on month-to-date (MTD) fund return generated as of December 16, 2016.

Performance Snapshot: Top Fund

Top performing fund: Hodges Institutional (HDPIX)

This fund continues to be the top YTD performance fund for the third straight week, primarily by having nearly 13% invested in the energy sector, which is up over 28% for the year. The top holding is Texas Pacific Land Trust (TPL), which is up over 128% for the year.

The following table provides the top performing mutual funds on a YTD basis, as of December 16, 2016. 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.

We provide this report on a weekly basis. To stay up to date with mutual fund market events, return to our News page.

Sign up for Advisor Access

Receive email updates about best performers, news, CE accredited webcasts and more.

Popular Articles

Download our free report

Find out why $30 trillon is invested in mutual funds.

Why 30 trillion is invested in mutual funds book

Why 30 trillion is invested in mutual funds book

Download our free report

Find out why $30 trillon is invested in mutual funds.

Why 30 trillion is invested in mutual funds book

Download our free report

Find out why $30 trillon is invested in mutual funds.


Read Next