- U.S. equity markets saw a slight rebound from last week’s decline.
- The best-performing fund so far for 2017 is the Wasatch Emerging India Institutional (WIINX).
- Small Cap Value 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 for the second week in a row, up 1.48%, and up 8.53% on a year-to-date basis. With all 34 of the major banks passing the Fed’s annual stress tests, the financial sector has seen big gains in the last two weeks.
Explore our Mutual Fund Education section to learn more about important mutual fund concepts.
International Equities – International markets were all negative for the week. The MSCI Developed Index had a decrease of 0.47%. The MSCI Emerging Index had a decline of 0.58% for the week. Japan’s NIKKEI 225 fell the most, declining 1.44% for the week and closing at 19,929.
Commodities – The commodity sector was also all negative. Crude oil had a slight decline of $0.70 per barrel and closed at $44.23 per barrel. The price of gold decreased $36 per troy ounce to close at $1,209. Copper was also down for the week, decreasing $0.05 to close at $2.65.
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 2 bps. The 10-year Treasury yield had an increase of 9 bps, while the 30-year Treasury yield increased 10 bps to 2.93%.
Municipal Bonds – Municipal yields also increased this week. The 2-year AAA-rated bonds increased 7 bps and the 10-year AAA-rated bonds increased 6 bps, while the 30-year AAA-rated bonds increased 6 bps and is yielding 2.87%. Municipal bond funds returned to a negative inflow of $461 million after last week’s positive inflow. The largest credit spread among Treasury and muni bonds increased by 1 bps to 55 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 | 1.70% | Invesco Small Cap Value Y | VSMIX | 4.84% | The fund has over 32% invested in financial services, which are up after all 34 major banks passed the Fed's stress test. |
| International Equity | China Equities | 0.48% | US Global Investors China Region Inv | USCOX | 4.59% | The fund invests in Chinese companies, with its largest holdings in Sunny Optical Technology Group Co Ltd (HKG:2382), which is up over 115% YTD. |
| Commodities | Broad Basket | -0.56% | VanEck CM Commodity Index A | CMCAX | 1.58% | With the price of oil down for the last month, this fund benefited by having 82% in cash. |
| Taxable Bonds | Preferred Stock | 1.10% | Orinda Income Opportunities I | OIOIX | 2.02% | The fund invests primarily in preferred stocks. The S&P U.S. Preferred Stock Index is up over 4.8% YTD. |
| Municipal Bonds | High-Yield Muni | -0.28% | Western Asset Short Duration Muni Inc I | SMDYX | 0.10% | 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 July 7, 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 | 35.22% | 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 | 29.88% | 1.01% | 33.30% | $136 | Technology |
| T. Rowe Price Global Technology | PRGTX | Global Equities / Technology | 28.72% | 0.90% | 54.60% | $4,890 | Technology |
| Transamerica Capital Growth I | TFOIX | Large Cap Growth Equities | 28.66% | 0.94% | 57.80% | $756 | Technology |