- U.S. equities return to the positive this week.
- 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.
Market Wrap-Up
The real estate sector was this week’s top-performing area, up 2.26%. The sector consists of real estate companies like American Tower Corporation (AMT) and Simon Properties Group (SPG), which were up 3.43% and 1.06% for the week, respectively.
Explore our Mutual Fund Education section to learn more about important mutual fund concepts.
International Equities – International markets also gained, with the exception of the Nikkei. The MSCI Developed Index increased of 0.61% to close at 1,928. The MSCI Emerging Index had the largest increase of 2.46% for the week and still remains the best-performing index on a year-to-date basis, up 28.23%. Japan’s Nikkei 225 saw another week of decline, falling 0.09% to close at 19,453.
Commodities – The commodity sector saw gains except for crude oil, which declined $0.64 per barrel and closed at $47.87 per barrel. The price of gold increased $7 per troy ounce to close at $1,293. Copper was also up for the week, increasing by $0.09 to close at $3.03.
Be sure to read our important tips on how to invest in the right commodity-based mutual fund.
Taxable Bonds – Treasury yields all fell this week, besides the 2-year Treasury, which gained 2 bps to yield 1.33%. The 10-year Treasury yield fell 2 bps, while the 30-year Treasury yield decreased 3 bps to 2.75%.
Municipal Bonds – Municipal yields fell across all maturities this week, with the 2-year AAA-rated bonds decreasing 1 bps. The 10-year AAA-rated bonds declined 2 bps, while the 30-year AAA-rated bond fell 2 bps to yield 2.75%. Municipal bond funds saw outflows of $763 million, snapping a five week inflow trend. The largest credit spread among Treasury and muni bonds increased by 1 bps to 61 bps for the 5-year securities.
Performance Snapshot: Top Fund Category
| Category | Top Subcategory | 1-Month Subcategory Return (%) | Top Subcategory Performer | Ticker | 1-Month Fund Return (%) | Performance Rationale |
|---|---|---|---|---|---|---|
| U.S. Equity Fund | Large Cap Growth | -1.47% | Artisan Thematic Investor | ARTTX | 3.94% | The fund has over 47% in technology, which is the number one performing sector this year. |
| International Equity | Latin America Equities | 6.56% | Deutsche Latin America Equity S | SLAFX | 8.77% | The fund invests in Latin American companies. For instance, its largest holding, Raia Drogasil SA (BVMF:RADL3), is up over 15% YTD. |
| Commodities | Broad Basket | 0.63% | DoubleLine Strategic Commodity N | DLCMX | 3.07% | WIth oil continuing to fall this week, the fund was protected by being heavily invested in over 79% cash. |
| Taxable Bonds | Government Bonds | 3.08% | Vanguard Extended Duration Trs Idx InsPl | VEDIX | 4.51% | The fund invests in long-term bonds, which saw a large movement with bond yields dropping. |
| Municipal Bonds | High Yield Muni | 0.68% | AB Municipal Income | MISHX | 1.22% | With muni bonds yields decreasing, high-yield bonds saw the largest gain in price. |
Performance Snapshot: Top Fund
The fund’s largest holding is in Tencent Holdings Ltd (HKG:0700), which is up over 70% on a year-to-date basis and around 6% for the trailing one-month.
Top 5 Performers
The following table provides the top-performing mutual funds on a YTD basis as of August 25, 2017. Only those funds that are rated five stars by Morningstar and that generated YTD returns greater than or equal to that achieved by the S&P 500 are included.
| Top-Performing Fund | Ticker | Category | YTD Return (%) | Net Expense Ratio (%) | % of Assets in Top 10 Holdings | Net Assets ($ Millions) | Top Sector Invested |
|---|---|---|---|---|---|---|---|
| Neuberger Berman Greater China Eq Instl | NCEIX | China Equities | 47.86% | 1.76% | 50.10% | $121 | Financial Services |
| Morgan Stanley Inst International Opp IS | MNOPX | Foreign Large Cap Growth Equities | 40.68% | 5.64% | 50.50% | $284 | Consumer Defense |
| Wasatch Emerging India Institutional | WIINX | India Equities | 37.67% | 2.00% | 35.30% | $226 | Financial Services |
| Matthews Asia Innovators Institutional | MITEX | Pacific/Asia ex-Japan Stk | 36.49% | 1.01% | 33.30% | $171 | Technology |
| Morgan Stanley Inst Global Opp IS | MGTSX | Global Equities | 35.43% | 3.82% | 55.80% | $1,280 | Technology |