- U.S. equities all saw gains this week, with the Dow Jones Industrial Average hitting a new all-time high.
- The best-performing fund so far for 2017 continues to be the Neuberger Berman Greater China Eq Instl (NCEIX).
- U.S. Small Value 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 energy sector was this week’s top-performing area, gaining 1.87%. The sector is composed of companies like Exxon Mobil Corp. (NYSE: XOM), which was up 1.88% for the week. However, the sector is still negative for the year, down 6.63%.
Explore our Mutual Fund Education section to learn more about important mutual fund concepts.
International Equities – International markets were a mixed bag this week, with the MSCI Developed Index showing a slight increase of 0.01% to close at 1,974. The MSCI Emerging Index had a decline of 1.82% for the week, but it remains the best-performing index on a year-to-date basis, up 28.14%. Japan’s Nikkei 225 had its third week of gains in a row, up 0.29%, to close at 20,356.
Commodities – The commodity sector was mostly positive with the exception of gold this week. Crude oil saw a gain for the fourth week in a row, up $1.01 per barrel and closing at $51.67 per barrel. The price of gold decreased $12 per troy ounce to close at $1,282. Copper saw a slight uptick of $0.01, to close at $2.96.
Be sure to read our important tips on how to invest in the right commodity-based mutual fund.
Taxable Bonds – Treasury yields continue to grow this week. The 2-year Treasury increased 5 bps to yield 1.48%. The 10-year Treasury yield increased 9 bps, while the 30-year Treasury yield increased 8 bps to 2.86%.
Municipal Bonds – Municipal yields also gained across all maturities this week. The 2-year AAA-rated bonds saw the week’s biggest increase of 12 bps to yield 1.02%. The 10-year AAA-rated bonds increased 7 bps, while the 30-year AAA-rated bond gained 7 bps and now yields 2.90%. Municipal bond funds saw inflows of $293 million for the fifth week in a row. The largest credit spread for the five-year securities decreased by 1 bps to settle at 57 bps for the week.
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 Value | 6.07% | Towle Deep Value | TDVFX | 16.23% | The fund’s second-largest holding, SkyWest Inc. (NASDAQ: SKYW), is up over 32% for the trailing one month. |
| International Equity | Latin America Equities | 3.25% | Fidelity Advisor® Latin America I | FLFIX | 3.35% | The fund invests in Latin American companies like Itau Unibanco Holding SA (ADR) (NYSE:ITUB), which is the fund’s largest holding and is up over 33% YTD. |
| Commodities | Broad Basket | 2.53% | Rydex Commodities Strategy H | RYMBX | 5.97% | With oil increasing, the fund had 30% of its holdings invested in oil. |
| Taxable Bonds | High Yield Bonds | 0.89% | Great-West Putnam High Yield Bond Inv | MXHYX | 2.98% | With bond yields increasing this week causing most bond prices to fall, high yield bonds managed to see the biggest gains. |
| Municipal Bonds | High Yield Muni | 0.29% | Pioneer High Income Municipal Y | HIMYX | 1.00% | With muni bonds yields increasing, high yield bonds performed better than others. |
Performance Snapshot: Top Fund
The fund’s largest holding is in Tencent Holdings Ltd (HKG:0700), which is up over 80% on a year-to-date basis.
Top 5 Performers
The following table provides the top-performing mutual funds on a YTD basis as of September 29, 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.
| Name | Ticker | Category | YTD % | Net Expense Ratio | % of Assets in Top 10 Holdings | Total Assets $ (Millions) | Top Sector Invested |
|---|---|---|---|---|---|---|---|
| Neuberger Berman Greater China Eq Instl | NCEIX | China Equities | 47.40% | 1.76% | 51.80% | $131 | Financial Services |
| Morgan Stanley Inst International Opp IS | MNOPX | Foreign Large Cap Growth Equities | 45.28% | 5.64% | 46.60% | $329 | Consumer Defense |
| Baillie Gifford EAFE 5 | BGEVX | Foreign Large Growth | 42.13% | 0.46% | 43.20% | $2,880 | Consumer Cyclical |
| Matthews China Small Companies | MCSMX | China Equities | 41.29% | 2.24% | 34.10% | $24 | Technology |
| Morgan Stanley Inst Global Opp IS | MGTSX | Global Equities | 40.22% | 3.82% | 57.60% | $1,420 | Technology |