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.

• European countries and the U.S. are gradually easing lockdown measures as they hope the worst of the pandemic is over. The ending of restrictions is being made in several phases in most countries and many European countries started phase one, including Germany, Spain, and Italy. The UK will start easing restrictions on June 1. In the U.S., many states began to ease lockdown measures even as the number of new infections continued to rise.

• U.S. inflation declined by 0.8% in April due to falling oil prices and lower transportation costs. This is the second consecutive monthly decrease after the prior month when the consumer price index (CPI) fell 0.4%. Year-over-year, inflation is up just 0.3%, giving plenty of ammunition for the Federal Reserve to stimulate the economy via money printing to achieve its goal of 2%. The gasoline index declined a staggering 20%, while items such as apparel, car insurance, and airline fares also declined dramatically. Meanwhile, the food index surged, posting the largest monthly increase since February 1974.

• UK GDP shrank by a record 5.8% in March, with the decline in output felt across the board, from closed restaurants to factories. During the first quarter, the UK economy declined by 2%.

• Germany’s economic output was surprisingly resilient in the first quarter of the year, falling by 2.2%. This was the highest contraction since the depth of the financial crisis in 2009.

• U.S. retail sales declined by 16.4% in April; last month they declined by 8.7%, as he consumer sentiment was hit by job losses and cash shortages.

• Europe-wide manufacturing and services sentiments improved in May. The manufacturing purchasing managers’ index (PMI) rose from 33.6 to 39.5, beating analysts’ expectations. The index remained deep in contraction territory. Anything above 50 indicates expansion. Meanwhile, services PMI picked up from a record low of 11.7 in April to 28.7.

• U.S. manufacturing PMI recovered from 36.9 to 39.8, while services PMI came in at 36.9, an improvement compared to April’s PMI of 27.

• The number of unemployment claims continued to fall in the U.S., although it remains at a historically very high level. A combined 5.5 million people filed for unemployment benefits during the two weeks ended May 15.

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.

• Markets were up during these past two weeks, despite thoroughly negative macroeconomic data across the board.

• Vanguard’s small-cap index fund (VSCIX) continued to be the best performer from the pack with a gain of 1.74%.

• Meanwhile, Vanguard’s large-cap index fund (VFIAX) was the worst performer with a rise of just 0.99%.

• Fixed income assets were all on the rise.

• Vanguard’s long-term investment grade bonds fund (VWESX) gained 2.8%, the best performer in this group.

• At the same time, Vanguard’s short-term treasuries fund (VFISX) rose 0.09%, the worst performer from the pack.

• Sectors were rather mixed.

• Vanguard’s consumer discretionary fund (VCDAX) recovered some of the losses, gaining 3.56% these past two weeks. This is the strongest performer from the bunch.

• Meanwhile, Vanguard’s real estate sector fund (VGSLX) was the biggest loser, falling by nearly 2%.

• Foreign equities were all down with three exceptions.

• T. Rowe Price’s Japan Fund (PRJPX) benefited from its safe-haven status and gained 3.9% over the past two weeks, the strongest performance within the group by far.

• At the same time, Fidelity’s China Fund (FHKCX) lost the most these past two weeks, down 1.86%.

• Real estate was the only loser in the alternative assets class.

• As reported above, Vanguard’s real estate sector fund (VGSLX) was down 1.94%, the only loser from the pack.

• Pimco’s emerging markets currencies fund (PLMIX) was up 1.4%.

Real estate equities have been sold off by investors, in a period when the broad market rallied. Small-caps were again one of the best performers, while consumer discretionary stocks recovered. Safe haven assets, such as Japanese equities and long-term investment-grade bonds, benefited from high investor demand.

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Fund returns data is reported for the period between May 8 and May 22.