Every fortnight, MutualFunds.com provides a snapshot of the performance of some key mutual funds which tries to accurately capture the investor interest in specific areas of the financial markets. The report is aimed at providing a quick overview of the sectors, regions and asset classes that moved in a meaningful manner during the last two weeks.
- The flow picture largely remained unchanged in the past two weeks, with capital withdrawn from equity funds and plowed into bonds.
- Total estimated outflows for the two weeks ended September 19 was $7.2 billion, lower compared to the prior two weeks. As usual, equity funds experienced outflows of more than $9.5 million, while bonds saw over $5 billion in inflows. Hybrid funds, which consist of both equities and bonds, experienced outflows of $2.8 billion. Taxable bonds were also in vogue, seeing around $5 billion in inflows.
- The U.S. and Canada have finally reached a trade deal to replace NAFTA. The new agreement, which also includes Mexico, governs more than $1 trillion in trade and will last 16 years. The deal will be reviewed every six years.
- The trade dispute between China and the U.S. has escalated, with both countries slapping additional tariffs on each other’s imports. U.S. was first to target $200 billion worth of Chinese imports with a 10% tariff. China struck back, imposing levies on $60 billion U.S. imports.
- The U.S. Federal Reserve has increased interest rates to 2.25%, in a widely expected move. The U.S. central bank exacerbated confidence in the economy and indicated another hike was possible this year, followed by three additional ones in 2019.
- Bank of Japan, meanwhile, kept its monetary policy steady, as expected, and committed to keeping interest rates low for a long period of time.
- Check out our previous edition of scorecard here.
International and Latin American equities were favored by investors this fortnight as a few months of poor performance made valuations attractive. The energy sector was buoyant, thanks to strong demand for oil and gas, while long-term bonds suffered as the Federal Reserve raised U.S. interest rates.
We provide this report on a fortnightly basis. To stay up to date with mutual fund market events, come back to our News page here.