- U.S. markets hit all-time highs again, with the DJIA closing at 20,624.
- The best-performing fund so far for 2017 is BlackRock Latin America I (MALTX).
- India Equities is the best month-to-date performing mutual fund subcategory.
- Make sure to check out the previous edition of the Weekly Roundup to keep track of changing trends.
Market Wrap-Up
The financial sector was the week’s best performing area, up 2.98% and up 5.26% on a year-to-date basis. Financials have been performing well due to President Trump reducing restrictions on the banking industry earlier this month.
Explore our Mutual Fund Education section to learn more about important mutual fund concepts.
International Equities – The MSCI Developed Index increased 0.86%, while the MSCI Emerging Index also gained and is up 0.97% for the week. Japan’s NIKKEI 225 declined 0.74% for the week and closed at 19,235.
Commodities – The commodity sector showed a negative gain, with oil declining $0.46 per barrel, or -0.86%, and closing at $53.40 per barrel. The price of gold increased $3 per troy ounce to reach $1,238. On the other hand, copper had decreased by $0.06 per pound, or -2.19%, and closed at $2.71.
Be sure to read our important tips on how to invest in the right commodity-based mutual fund.
Taxable Bonds – Treasury yields remained relatively stable this week, with the only movement coming from 30-year Treasuries, which increased 1 bps to 3.02%
Municipal Bonds – Municipal yields all increased for the week across all maturities. The 2-year AAA-rated yields saw a slight increase of 1 bps, while the 10-year and 30-year AAA-rated yields increased 7 bps and 5 bps, respectively.
For the sixth week, municipal bond funds saw an inflow of $468 million. With no expectation of a drastic rise in rates till later in the year, investors are flocking to tax-free income sources.
In this context, you can also read about essential tax tips for mutual funds, so that you are aware of key strategies to limit your tax burden.
Performance Snapshot: Top Fund Category
| Category | Top Subcategory | MTD Subcategory Return (%) | Top Subcategory Performer | Ticker | MTD Fund Return (%) | Performance Rationale |
|---|---|---|---|---|---|---|
| U.S. Equity Fund | Mid Cap Growth | 4.47% | Tocqueville Opportunity | TOPPX | 9.73% | The fund invests in two sectors – healthcare and technology – which both performed well this year. |
| International Equity | Latin America Equities | 8.33% | Bradesco Latin American Equity Instl | BDEIX | 9.57% | This fund specializes in companies in Latin America, with its second largest holding in Itau Unibanco Holding SA (ADR), which is up over 27%. |
| Commodities | Broad Basket | -0.57% | Catalyst Hedged Commodity Strategy A | CFHAX | 1.68% | Fund invests in commodity options and hedging strategies. With the commodity markets pulling back this week, the fund has been protected with its large cash position. |
| Taxable Bonds | Preferred Stock | 1.32% | Destra Flaherty & Crumrine Pref & Inc I | DPIIX | 1.94% | Fund invests in income-producing taxable investments like preferred stock and convertible bonds. |
| Municipal Bonds | High Yield Municipal Bonds | 0.09% | MainStay High Yield Municipal Bond I | MMHIX | 1.54% | Investors are looking at high-yield tax-free bonds to maximize income. |
Performance Snapshot: Top Fund
This fund’s largest holding is in Banco Bradesco SA ADR (BBD), which is up over 21% year-to-date.
Top 5 Performers
The following table provides the top-performing mutual funds on a YTD basis as of February 17, 2017. Only those funds that are rated 5 stars by Morningstar and that generated YTD returns 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 10 Holdings | Net Assets $ (Millions) | Top Sector Invested |
|---|---|---|---|---|---|---|---|
| BlackRock Latin America I | MALTX | Latin America Equities | 15.34% | 1.33% | 47.90% | $162 | Financial Services |
| T. Rowe Price Global Technology | PRGTX | Global Equities | 14.52% | 0.91% | 61.20% | $3,250 | Technology |
| First Eagle Gold I | FEGIX | Precious Metals | 14.45% | 0.98% | 62.70% | $1,220 | Basic Materials |
| Wasatch Emerging India Investor | WAINX | India Equities | 13.00% | 1.96% | 32.90% | $90 | Financial Services |
| Columbia Seligman Comms & Info R5 | SCMIX | Technology Equities | 12.65% | 0.98% | 46.40% | $4,650 | Technology |