- U.S. equities decline for the second week in a row while most international equities gain.
- The best-performing fund so far for 2017 continues to be the Neuberger Berman Greater China Eq Instl (NCEIX).
- Latin America Equities is the best-performing mutual fund subcategory based on the rolling month.
- Make sure to check out the previous edition of the Weekly Roundup to keep track of changing trends in the mutual funds space.
Market Wrap-Up
The utilities sector was this week’s top-performing area, up 1.49%. The sector is considered defensive in nature and where investors flock to when they are worried about market pullbacks. The sector performed well last week thanks to companies like NextEra Energy Inc. (NEE), which was up 1.87% and up over 25% on a year-to-date basis.
Explore our Mutual Fund Education section to learn more about important mutual fund concepts.
International Equities – On the contrary, international markets were up, with the exception of the Nikkei. The MSCI Developed Index increased of 0.07% to close at 1,917. The MSCI Emerging Index had a larger increase of 1.64% for the week and still remains the best-performing index on a year-to-date basis, up 25.15%. Japan’s Nikkei 225 saw another week of decline, dropping 1.31% to close at 19,470.
Commodities – The commodity sector decreased, apart from copper. Crude oil declined $0.31 per barrel and closed at $48.51 per barrel. The price of gold decreased $2 per troy ounce to close at $1,286. Copper was up slightly for the week, increasing by $0.03 to close at $2.94.
Be sure to read our important tips on how to invest in the right commodity-based mutual fund.
Taxable Bonds – Treasury yields were a mixed bag across all maturities. The 2-year Treasury gained 2 bps to yield 1.31% this week. The 10-year Treasury yield remained unchanged, while the 30-year Treasury yield decreased 1 bps to 2.78%.
Municipal Bonds – Similar to Treasury yields, municipal yields also showed no pattern. The 2-year AAA-rated bonds decreased 1 bps. The 10-year AAA-rated bonds gained 3 bps, while the 30-year AAA-rated bond gained 4 bps and yields 2.77%. Municipal bond funds saw inflows for the fifth week in a row, pulling in $487 million. The largest credit spread among Treasury and muni bonds increased by 4 bps to 60 bps for the 5-year securities.
Performance Snapshot: Top Fund Category
| Category | Top Subcategory | 1-Month Subcategory Return (%) | Top Subcategory Performer | Ticker | 1-Month Fund Return (%) | Performance Rationale |
|---|---|---|---|---|---|---|
| U.S. Equity Fund | Large Cap Growth | -1.41% | Kinetics Internet No Load | WWWFX | 6.21% | The fund invests in internet-based companies like Alphabet, Inc. (GOOGL) which is up over 16% YTD. |
| International Equity | Latin America Equities | 3.92% | Deutsche Latin America Equity A | SLANX | 5.51% | The fund invests in Latin American companies, like Raia Drogasil SA (BVMF:RADL3), which is up over 11% YTD. This is the fund’s largest holding. |
| Commodities | Broad Basket | 0.81% | Credit Suisse Commodity Acss Strat I | CRCIX | 4.39% | WIth oil continuing to fall this week, this fund was protected by being heavily invested in over 74% bonds. |
| Taxable Bonds | Government Bonds | 1.63% | PIMCO Extended Duration Instl | PEDIX | 2.54% | This fund invests in long-term bonds, which saw a large movement with bond yields dropping. |
| Municipal Bonds | High Yield Muni | 0.64% | Victory High Income Municipal Bond Y | RHMYX | 1.30% | With muni bonds yields increasing in intermediate and long-term maturities, high-yield bonds were the least affected. |
Performance Snapshot: Top Fund
The fund’s largest holding is in Tencent Holdings Ltd (HKG:0700), which is up over 71% on a year-to-date basis and around 9% for the trailing one-month.
Top 5 Performers
The following table provides the top-performing mutual funds on a YTD basis as of August 18, 2017. Only those funds that are rated five stars by Morningstar and that generated YTD returns greater than or equal to that achieved by the S&P 500 are included.
| Top-Performing Fund | Ticker | Category | YTD Return (%) | Net Expense Ratio (%) | % of Assets in Top 10 Holdings | Net Assets ($ Millions) | Top Sector Invested |
|---|---|---|---|---|---|---|---|
| Neuberger Berman Greater China Eq Instl | NCEIX | China Equities | 43.39% | 1.76% | 50.10% | $104 | Financial Services |
| Morgan Stanley Inst International Opp IS | MNOPX | Foreign Large Cap Growth Equities | 40.20% | 5.64% | 50.50% | $230 | Consumer Defense |
| Wasatch Emerging India Institutional | WIINX | India Equities | 36.54% | 2.00% | 35.00% | $200 | Financial Services |
| Morgan Stanley Inst Global Opp IS | MGTSX | Global Equities | 35.49% | 3.82% | 55.80% | $1,130 | Technology |
| Matthews Asia Innovators Institutional | MITEX | Pacific/Asia ex-Japan Stk | 34.52% | 1.01% | 33.30% | $149 | Technology |