Mutual Funds Scorecard: August 6 Edition

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Mutual Funds Scorecard August 6 2019

News

Mutual Funds Scorecard: August 6 Edition

Iuri Struta Aug 06, 2019



  • Total long-term flows were negative for the two weeks ended July 24, with a big difference between equity and bond outflows.
  • Investors withdrew a combined $18.2 billion from equity mutual funds, with domestic and large-cap equities suffering most outflows. At the same time, bonds experienced $16.5 billion in inflows, with taxable and investment-grade bonds among the largest beneficiaries.
  • The European Central Bank strongly hinted that another rate cut could be on the horizon, saying the Eurozone economy still needs a great degree of accommodative monetary policy. The bank said interest rates are likely to stay low at least through mid-2020.
  • Across the pond, the U.S. Federal Reserve already cut its interest rates a quarter of a percentage point, to a range of 2%-2.25%, and indicated that further rate cuts are likely in order to support a feeble economy.
  • As expected, Boris Johnson became the Prime Minister of the United Kingdom, triggering fears he will deliver on his promise to take the country out of the European Union without a deal.
  • The financial markets received another shock after the latest escalation in the trade war between the U.S. and China. After President Donald Trump imposed a 10% tariff on $300 billion of Chinese imports against the advice of a majority of his advisers, China allowed its currency to shrink below the psychological 7 yuan to the dollar level. The ball is now in Trump’s court and the trade war might get uglier.
  • The European confidence indicators are not showing optimism. Most notably, Germany’s flash manufacturing PMI fell deeper into contraction territory to 43.1 in July, reaching a level not seen since the height of the economic crisis in 2009. Europe-wide manufacturing PMI declined to 46.4, a seven-year low.
  • U.S. GDP increased by 2.1% in the second quarter, a significant slowdown compared with the 3.1% advance in the prior quarter, although the figure beat expectation of 1.8% growth.
  • Meanwhile, the Euro area economy expanded just by 0.2% in the second quarter, while year-over-year the GDP advanced 1.1% compared with 1.2% in the previous quarter.
  • The U.S. labor market remained one of the few bright spots, with the economy adding 164,000 jobs in July, which was in line with forecasts. The unemployment rate remained at 3.7%, while average hourly earnings advanced 0.3%.

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Broad Indices


  • Technology equities fund (NASDX) have lost 6.31% for the two weeks ended August 5, as investors pulled out money due to trade war escalation and fears of an economic slowdown.
  • Amid equity carnage, investors found safety in bonds, with the Vanguard’s total bond market fund (VBMFX) advancing 1.47%.

Click here to explore other funds from Vanguard.

Broad Indices August 6 2019

Major Sectors


  • Sectors were almost all down.
  • As expected, the technology sector fund (PGTIX) lost 8.5%, and was the worst performer.
  • Fidelity’s real estate sector fund (FRIFX) advanced 0.24%, the only gainer from the pack.

Make sure to click here to learn about other funds from Fidelity.

Major Sectors August 6 2019

Foreign Funds


  • Foreign equities were all down.
  • Vanguard’s emerging markets fund (VEIEX) was the biggest loser these past two weeks, as China is particularly set to suffer from the trade war escalation.
  • Amid the foreign equity bloodbath, the Japanese equities fund (HJPNX) fell the least, down 2.7%.

Foreign Funds August 9 2019

Major Asset Classes


  • In asset classes, the picture was mixed, with the performance of bonds and equities diverging.
  • PIMCO’s long-term bonds fund (PEDIX) gained 7.5%, beating all other asset classes from the pack.
  • On the other hand, Vanguard’s broad market equities fund (VFINX) declined 4.7%, the worst performer from the pack.

Click here to explore all funds from Pimco.

Major Asset Classes August 6 2019

The Bottom Line


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