- Dow Jones Industrial Index (DJIA) declined, but S&P 500 and NASDAQ showed marginal gains.
- Markets bounced back on Friday, as Donald Trump took office.
- The best-performing fund for 2017, so far, is the Invesco Gold & Precious Metals Investor (FGLDX).
- Make sure to check out the previous edition of the Weekly Roundup to get the whole picture.
Market Wrap-Up
The consumer staples sector was the week’s best performer, up 2.05% for the week and up 1.62% for the year. As investors worry about the economy’s future, consumer staples are considered one of the more defensive sectors in the market.
International Equity – International markets were also sluggish for the week, with the MSCI Developed Index decreasing 0.47% for the week and the MSCI Emerging Index down 0.30%. Japan’s NIKKEI showed little gain, up only 0.02% for the week.
Commodities – The commodity sector was mixed, with oil declining $0.59 per barrel, or -1.11%, and closing at $52.42 per barrel. The price of gold continued its positive trend for the fourth week in a row and was up $5 per troy ounce. Copper, on the other hand, declined $0.05 per pound, or -1.88%.
Be sure to check our important tips on how to invest in the right commodity-based mutual fund.
Taxable Bonds – Long-term Treasury bond yields increased for the week, while the 2-year Treasury remained flat. Both the 10-year and 30-year Treasuries increased 7 bps and 6 bps, respectively. 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.
Municipal Bonds – Short-term AAA-rated 2-year municipal yields dropped 1 bps to 1.12%. The 10-year and 30-year AAA-rated municipals both increased their yields by 12 bps from the week prior. Municipal fund flows showed second consecutive week of inflows, with a $546 million increase of assets.
Performance Snapshot: Top Fund Category
| Category | Top Subcategory | MTD Subcategory Return (%) | Top Subcategory Performer | MTD Fund Return (%) | Performance Rationale |
|---|---|---|---|---|---|
| U.S. Equity Fund | Large Growth | 1.38% | AMREX | 10.21% | Fund has large exposure to health care, which is one of the best performing sectors this year. |
| International Equity | Latin American Stock | 12.18% | SLARX | 13.11% | The Latin American sector is the best performing international sector and this fund specializes in this area |
| Commodities | Broad Basket | 2.67% | QRCRX | 7.36% | Fund has high exposure to gold, which had big gains for the week. |
| Taxable Bonds | Long Government | 2.01% | PEDIX | 2.91% | Fund invests in government bonds of longer maturity whose price rose this week. |
| Municipal Bonds | High Yield Munis | 1.17% | DYBIX | 1.95% | 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 over 32% year-to-date.
The following table provides the top-performing mutual funds on a YTD basis, as of January 20, 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 | 12.56% | 1.54% | 23.62% | $289 | Basic Materials |
| U.S. Global Investors Gld & Prec Mtls | USERX | Precious Metals | 12.07% | 2.13% | 37.71% | $91 | Basic Materials |
| First Eagle Gold | FEGOX | Precious Metals | 8.39% | 2.14% | 40.79% | $1,100 | Basic Materials |
| T. Rowe Price Global Technology | PRGTX | Global Equities | 7.87% | 0.91% | 31.67% | $3,250 | Technology |
| BlackRock Latin America Instl | MALTX | Latin America Equities | 7.66% | 1.33% | 33.68% | $162 | Financial Services |