- U.S. markets hit all-time highs for the fourth week in a row, with the DJIA closing at 21,006.
- The best-performing fund so far for 2017 is T. Rowe Price Global Technology (PRGTX).
- Large Cap Growth Equities is the best performing mutual fund subcategory based on 1-month return.
- Make sure to check out the previous edition of the Weekly Roundup to keep track of changing trends.
The financial sector had the week’s largest gain, up by 2.08% while being up by 7.33% year-to-date. With the Fed expected to raise interest rates in March, financial stocks benefit the most from the rate hike.
Explore our Mutual Fund Education section to learn more about important mutual fund concepts.
International Equities – The MSCI Developed Index had a slight increase of 0.47%, while the MSCI Emerging Index declined by 1.28% for the week. Japan’s NIKKEI 225 rebounded with an increase of 0.96% for the week and closed at 19,469.
Commodities – The commodity sector declined overall, with oil decreasing by $0.66 per barrel and closing at $53.33 per barrel. The price of gold decreased by $31 per troy ounce to $1,226. On the other hand, copper had a modest increase of $0.02 per pound and closed at $2.70.
Be sure to read our important tips on how to invest in the right commodity-based mutual fund.
Taxable Bonds – Treasury yields increased across all maturities, with the largest gain coming from both the 2-year and 10-year Treasury yields which increased by 17 bps. The 30-year Treasury also saw a big increase, up 12 bps to 3.07%.
Municipal Bonds – Municipal yields increased in both the 10-year and 30-year while the 2-year remained the same. The 2-year AAA-rated municipal yield remains at 1.01%, while the 10-year and 30-year AAA-rated yields increased by 12 and 11 bps, respectively.
After seven weeks of inflows, municipal bond funds had an outflow of -$241 million. With the Fed indicating that there may be a rise in interest rates this month, investors seem to be fleeing from bond funds that are likely to be negatively impacted.
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||1-Month Subcategory Return (%)||Top Subcategory Performer||Ticker||1-Month Fund Return (%)||Performance Rationale|
|U.S. Equity Fund||Large Cap Growth||3.68%||Biondo Focus Investor||BFONX||8.75%||Top two sectors invested are technology and healthcare, which are both performing well for the year.|
|International Equity||Latin America Stock||2.92%||Fidelity Advisor® Latin America I||FLFIX||4.43%||This fund specializes in Latin America, with the top holding in Itau Unibanco Holding SA (ADR) which is up 25% YTD.|
|Commodities||Broad Basket||-1.02%||Catalyst Hedged Commodity Strategy I||CFHIX||1.30%||This 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||Emerging Markets Bond||1.10%||American Beacon Glb Evl Ftr Mks Inc Inst||AGEIX||2.80%||This fund invests in bonds of emerging market countries and the JP Morgan Emerging Bond Index is up 2.93% on a YTD basis.|
|Municipal Bonds||High Yield Municipal Bonds||0.65%||MainStay High Yield Municipal Bond A||MMHAX||1.84%||With bond prices falling, high-yield tax-free bond funds tend to perform better, especially against longer maturity bonds.|
Performance Snapshot: Top Fund
This fund’s largest holding is in Salesforce.com, Inc (CRM) which is up more than 20% YTD.
Top 5 Performers
The following table provides the top-performing mutual funds on a YTD basis as of March 3, 2017. Only those funds that are rated 5 stars by Morningstar and that generated YTD returns greater than the one 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|
|T. Rowe Price Global Technology||PRGTX||Global Equities||14.98%||0.91%||61.20%||$3,250||Technology|
|Fidelity® Select Medical Equip & Systems||FSMEX||Health & Biotech Equities||14.10%||0.76%||62.40%||$2,870||Healthcare|
|T. Rowe Price Health Sciences||PRHSX||Health & Biotech Equities||13.71%||0.77%||32.30%||$10,200||Healthcare|
|VALIC Company I Health Sciences||VCHSX||Health & Biotech Equities||13.65%||1.09%||32.10%||$720||Healthcare|
|Columbia Seligman Comms & Info R5||SCMIX||Technology Equities||11.91%||0.98%||46.40%||$4,860||Technology|
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