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.

• A host of countries in Europe, including Italy and Germany, has started to ease lockdown measures, triggering fears the number of daily COVID-19 cases will rise. Indeed, this is exactly what happened in Germany. There are now 4.2 million registered cases of coronavirus and a third of those are in the U.S., which has reported the most number of cases so far.

• U.S. GDP in Q1 2020 declined by 4.8%, the highest decrease since the Global Financial Crisis of 2009. Since the U.S. economy was not in lockdown mode for most of Q1, it could mean the decline could be worse in Q2 2020.

• The U.S. Federal Reserve is unlikely to consider negative interest rates to stimulate the U.S. economy. As such, it will not follow in the footsteps of the European Central Bank and Bank of Japan, two of the developed world’s central banks that have been keeping interest rates negative in desperate bids to spur inflation.

• The build-up in crude oil inventories in the U.S. has eased over the past two weeks, with stockpiles rising by a combined 14 million barrels. Stockpiles have been increasing since January 23, as the COVID-19 pandemic curtailed demand for fuel.

• Chinese manufacturing purchasing managers’ index (PMI) remained in expansion territory in April, at 50.8, falling from 52 in the prior month. This suggests optimism in the manufacturing industry is slowly picking up after a dramatic drop in February.

• Eurozone GDP fell 3.8% in the first quarter, despite key countries such as Italy, France and Germany being closed for a good part of the quarter. French output dropped 5.8%, Spain’s declined 5.2% and Italy contracted by 4.7%.

• The European Central Bank kept interest rates unchanged but decided to ease the conditions for banks to borrow money from its facilities. It will continue to buy government bonds as part of its monetary easing program to counter the economic effects of the COVID-19 pandemic worth 750 billion euros.

• Europe-wide manufacturing PMI crashed to 33.4 in April from 44.5 in the prior month, as the lockdown measures dented sentiment in the region’s manufacturing industry. Not that the sentiment was great before the crisis – the PMI has been hovering in contraction territory since March 2019.

• The rise in U.S. unemployment claims has eased over the past two weeks, with nearly 7 million people out of the job market. In the prior two-week period, around 10 million people filed for benefits in the U.S.

• The U.S. unemployment rate surged to a record high of 14.7% in April and is likely to continue to rise over the next few months. The U.S. economy lost more than 20 million jobs over the past month. Those that managed to keep their job experienced a surprising rise in earnings, with average hourly earnings jumping by 4.7%. If this continues to rise, an uptick in inflation could be just around the corner.

Check our previous edition of the scorecard here.

• Markets continued to rally in the U.S., as investors were confident that the Federal Reserve and government measures would limit economic damage.

• Vanguard’s small-cap index fund (VSCIX) gained 8.5% over the past two weeks, the best performer from the pack.

• Meanwhile, the Vanguard’s S&P 500 proxy (VFIAX) added just 3.4% to its performance, making it the weakest of its peers.

• Fixed income asset performance was mixed.

• Vanguard’s long-term investment-grade bonds fund (VWESX) shed nearly 4% over the past two weeks, the biggest loss from the bunch.

• At the same time, Vanguard’s high yield bonds fund (VWEHX) appreciated by 0.9% over the past two weeks, representing the best performance among major U.S. fixed income sub-asset classes.

• Sectors were all up with two exceptions.

• Fidelity’s utilities sector proxy (FKUQX) declined 2.80%, as investors rotated money out of safe-haven assets into riskier ones.

• Unsurprisingly, the best performer is the Vanguard’s technology sector fund (VITAX), which advanced by 7.6%, as many technology companies benefited from the stay-at-home economy.

• Foreign equities were all up.

• Fidelity’s Latin American equities fund (FLATX) posted the best performance from the pack, up nearly 8%, after being the worst performer in the prior two-week period.

• Matthews India equities fund (MINDX) recorded the weakest gain, up a little more than 3%.

• Alternative assets were all up as well.

• The PIMCO’s broad commodity fund (PCRIX) finally posted gains and has become the best performer from the pack with an advance of 4.7%.

• Meanwhile, Cohen and Steers’ preferred stocks fund (CPXIX) gained only 1% and is the weakest performer.

Investors have embraced risky assets over the past two weeks, thanks to stimulus measures implemented by the central banks across the world to counter the negative effects of the COVID-19 pandemic. Small-cap stocks, high-yield bonds and Latin American equities were among the best performers, while utility stocks and investment-grade bonds declined.

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Fund returns data is reported for the period between April 24 and May 8.