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.

• Long-term flows were slightly positive in the past two weeks, largely thanks to strong bond inflows, offset by negative equity flows. Nearly $10 billion was withdrawn from equities for the two weeks ended April 17, while bonds saw more than $12 billion in inflows. Overall, total long-term flows were positive at a little less than $1 billion.

• Domestic equities and large-cap companies were particularly hit, while taxable bonds saw the largest inflows.

• Bank of Japan promised to keep interest rates at record-low levels until 2020 – the first time it gave a more precise indication of how long the monetary stimulus will be maintained. With slowing growth and inflation below its 2% target, the central bank faces pressure to come up with new ideas, although two committee members disagreed with the proposed approach. The bank relaxed the collateral conditions on its lending facility, agreeing to accept lower-graded debt as collateral for funds.

• U.S. GDP advanced a strong 3.2% in the first three months of the year versus expectations of 2.2%, largely due to a jump in raw materials and finished goods inventories, as well as strong government spending. Consumer spending was rather weak.

• U.K. inflation unexpectedly came in below the 2% threshold in March at 1.9%, even as the economy faces uncertainty stemming from Brexit. Core inflation remained at 1.8%.
  Europe-wide manufacturing purchasing managers’ index (PMI) remained below the 50 level indicating expansion in April, while services PMI declined from 53.3 to 52.2.

• Against expectations, U.S. retail sales grew 1.6% in March, versus a drop of 0.2% in the prior month. Core retail sales advanced 1.2% over the same period, beating expectations of 0.7%.

• U.S. core durable goods orders rose 0.4% in March, comfortably beating expectations of 0.2%. This is a marked improvement from the prior month’s drop of 0.1%.

• Broad indices were almost all up, with technology stocks and broad U.S. markets particularly strong.

• The technology sector fund (NASDX) advanced 2.14% over the past two weeks, comfortably beating all its peers.

• On the other side, Vanguard’s global stock market fund (VGTSX) was the only faller, down 0.18%.

• Sectors were rather mixed, with telecom services, consumer staples, and technology equities posting strong gains, and energy, healthcare and chemicals showing weak returns.

• Telecommunication services fund (VTCAX) advanced 2.53% these two weeks, as investors cheered the advent of 5G after AT&T launched the new technology recently.

• At the same time, healthcare sector fund (THISX) lost 2.13% for the past two weeks and is again the worst performer from the pack. The sector was hit by fears of the potential adoption of a universal healthcare system in the U.S. – an idea that started gathering steam.

• Foreign funds were all down with two exceptions.

• Japanese fund (“HJPNX”: https://mutualfunds.com/funds/hjpnx-hennessy-japan-investor/) advanced more than 1.56% as the Bank of Japan provided more clarity about its ongoing stimulus program.

• Meanwhile, Chinese equities fund (MICDX) declined 1.64% over the past two weeks, becoming the worst performer.

• Managed futures fund (EVONX) was the best-performing fund within major asset classses for the past two weeks, gaining 1.83%.

• Meanwhile, John Hancock’s multicurrency fund (“JCUAX”: https://mutualfunds.com/funds/jcuax-jhancock-absolute-return-currency-a/) lost 0.80%, representing the worst performance.

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Flows managed to be positive by a hair, as bonds continued to experience strong inflows and equities saw negative outflows. Technology and telecommunication stocks have been performing quite well over the past two weeks, while the healthcare sector and Chinese stocks were hammered.

We provide this report on a fortnightly basis. To stay up to date with mutual fund market events, return to our News page here.