- U.S. equity markets were all in the negative territory this week, while oil is finally seeing rebounds.
- The best-performing fund so far for 2017 is the Wasatch Emerging India Institutional (WIINX).
- China Equities are the best-performing rolling-one-month 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 this week’s top-performing area, up 3.29%, and up 6.88% on a year-to-date basis. This was led by the big banks including the Bank of America (BAC) and Wells Fargo Co. (WFC), which are both up over 9% and 6% over the last week, respectively.
Explore our Mutual Fund Education section to learn more about important mutual fund concepts.
International Equities – International markets were also mostly negative for the week, with the exception of the MSCI Emerging Index. The MSCI Developed Index had a slight decrease of 0.25%. The MSCI Emerging Index had a slight increase of 0.14% for the week. Japan’s NIKKEI 225 also fell 0.49% for the week and closed at 20,033.
Commodities – The commodity sector was all positive besides gold. Crude oil finally showed gains this week and was up $3.03 per barrel and closed at $46.04 per barrel. The price of gold decreased $16 per troy ounce to close at $1,241. Copper was also up for the week, increasing $0.09 to close 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 all increased this week with the 2-year Treasury increasing 4 bps. The 10-year Treasury yield had a big increase of 16 bps while the 30-year Treasury yield increased 11 bps to 2.83%.
Municipal Bonds – Municipal yields also had big increases. The 2-year AAA-rated bonds increased 9 bps; the 10-year AAA-rated bonds increased 12 bps, while the 30-year AAA-rated bonds increased 11 bps. Municipal bond funds return to a positive inflow of $413 million after last week’s large outflow. The largest credit spread among Treasury and muni bonds increased by 2 bps to 54 bps for the 5-year securities.
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 | Small Cap Value | 2.91% | Small Cap Value | SCAPX | 7.04% | The fund's largest holding is Myriad Genetics, Inc. (NASDAQ: MYGN), which is up over 54% on a YTD basis. |
| International Equity | China Equities | 2.92% | Neuberger Berman Greater China Eq Instl | NCEIX | 5.24% | The fund invests in Chinese companies, with its largest holdings in Tencent Holdings Ltd. (HKG:0700), which is up over 40% YTD. |
| Commodities | Broad Basket | -0.93% | Catalyst Hedged Commodity Strategy A | CFHAX | 0.37% | With the price of oil having a good week, this fund benefited from moving from Treasuries into oil futures. |
| Taxable Bonds | Preferred Stock | 1.31% | Orinda Income Opportunities I | OIOIX | 2.50% | The fund invests primarily in preferred stock, convertible bonds and REITS. The Preferred Stock Index is up over 5% YTD. |
| Municipal Bonds | High Yield Muni | -0.12% | Invesco Short Duration High Yld Muni R5 | ISHFX | 0.20% | With muni yields all increasing this week, muni bond funds fell in price. Because this fund uses a short duration, it was less affected. |
Performance Snapshot: Top Fund
The fund’s largest holding is in Housing Development Finance Corp Ltd (NSE:HDFC), which is up over 28% on a year-to-date basis.
Top 5 Performers
The following table provides the top-performing mutual funds on a YTD basis as of June 30, 2017. Only those funds that are rated five stars by Morningstar and that generated YTD returns greater than or equal to 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 |
|---|---|---|---|---|---|---|---|
| Wasatch Emerging India Institutional | WIINX | India Equities | 34.22% | 2.00% | 35.00% | $182 | Financial Services |
| Neuberger Berman Greater China Eq Instl | NCEIX | China Equities | 32.62% | 1.76% | 50.10% | $95 | Financial Services |
| Matthews Asia Innovators Institutional | MITEX | Pacific/Asia ex-Japan Stk | 30.28% | 1.01% | 33.30% | $136 | Technology |
| Morgan Stanley Inst International Opp I | MIOIX | Foreign Large Cap Growth Equities | 30.07% | 1.34% | 50.50% | $196 | Consumer Defense |
| Baron Partners Institutional | BPTIX | Mid Cap Growth Equities | 28.62% | 1.52% | 97.60% | $1,990 | Consumer Cyclical |