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The consumer discretionary sector was the week’s best performer, up 0.84% for the week and up more than 3% for the year. This is likely due to the strength in the economy, which is causing consumers to spend more of their income on discretionary items.
International Equity – Unlike the U.S. markets, the international markets were up, with the MSCI Developed Index increasing 0.82% for the week and the MSCI Emerging Index up 1.69%. Japan’s NIKKEI corrected from the week before, down 0.86% for the week. The Yen dropped 1.61% compared to the dollar over the last week, partially contributing to the poor performance in the NIKKEI.
Commodities – The commodity sector was mixed, with oil down $1.62 per barrel, or 3.00%, and closing at $52.37 per barrel. The price of gold continued its positive trend for the third week in a row and was up $23 per troy ounce. Copper continued to show a positive trend with a big gain this week, up $0.14 per pound or 5.49%.
Be sure to check our important tips on how to invest in the right commodity-based mutual fund.
Taxable Bonds – The Treasury bond yields all declined for the week, with the 2-year Treasury yield decreasing 2 bps to 1.19%. Both the 10-year and 30-year treasuries went down by 2 bps. 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 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 7 bps and 10 bps, respectively, from the week before. The 30-year AAA-rated municipal bond yield declined 9 bps from the week prior. Municipal fund flows finally showed inflows of $79 million, recovering from a 7-week trend of outflows.
|Category||Top Subcategory||MTD Subcategory Return (%)||Top Subcategory Performer||MTD Fund Return (%)||Performance Rationale|
|U.S. Equity Fund||Large Growth||1.51%||AMREX||7.16%||Fund has large exposure to health care, which is one of the best-performing sectors this year.|
|International Equity||Latin American Stock||6.57%||SLARX||7.80%||The Latin American sector is the best-performing international sector and this fund specializes in this area.|
|Commodities||Broad Basket||0.97%||QRCRX||3.02%||Fund has high exposure to gold, which had big gains for the week.|
|Taxable Bonds||Long Government||2.67%||PEDIX||4.82%||Fund invests in government bonds of longer maturity. As Treasury yields dropped, long-term bond prices rose the most.|
|Municipal Bonds||Muni California Long||1.65%||NHCAX||2.88%||With bond yield declining over the past week, high-yield bonds had big gains.|
This fund is heavily invested in gold mining companies, with the top holding Klondex Mines Ltd. (KLDX) up more than 10% for the year.
The following table provides the top-performing mutual funds on a YTD basis, as of Jan. 13, 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|
|US Global Investors Gld & Prec Mtls||USERX||Precious Metals||11.51%||2.13%||37.71%||$91||Basic Materials|
|Invesco Gold & Precious Metals Investor||FGLDX||Precious Metals||10.89%||1.54%||23.62%||$289||Basic Materials|
|T. Rowe Price Global Technology||PRGTX||Global Equities||7.41%||0.91%||31.67%||$3,250||Technology|
|First Eagle Gold||FEGOX||Precious Metals||7.13%||2.14%||40.79%||$1,100||Basic Materials|
|Fidelity Select Medical Equip & Systems||FSEMX||Health & Biotech Equities||6.49%||0.76%||45.90%||$2,660||Healthcare|
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