Every fortnight, MutualFunds.com provides a snapshot of the performance of some key mutual funds, which tries to accurately capture 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.

• It’s a good sign for investors that the number of global daily COVID-19 cases has stabilized at less than 300,000 over the past month. There are more than 22 million coronavirus cases globally as of August 18, with half the cases in the top three most-affected countries, the United States, Brazil, and India. Russia has registered the world’s first vaccine against the coronavirus, although Western countries expressed skepticism over its safety and efficacy. Still, it is estimated that a safe and effective vaccine will be developed by the end of the year and could be available in the developed world by mid-2021.

• Despite economic havoc caused by the pandemic, optimism in the U.S. manufacturing industry runs surprisingly high. ISM’s manufacturing purchasing managers’ index (PMI) surged to 54.2 in August, the highest reading since April 2019. ISM’s non-manufacturing PMI rose to 58.1, reaching a high not seen since March 2019.

• Meanwhile, a range of services PMI in Eurozone countries continued to show expansion.

• U.S. crude oil inventories have fallen for three consecutive weeks, boding well for the oil industry.

• The Bank of England has kept interest rates steady at 0.1% but warned of slower growth than expected ahead. The Central Bank also decided not to extend its bond-buying program for the time being. In March, it announced an asset purchase facility worth 745 billion pounds.

• U.S. unemployment claims have fallen below one million for the first time since the pandemic started. However, it is too early to declare that the job market is back to normal. Continuing claims totaled 15.5 million, well higher than pre-pandemic levels.

• The U.S. economy added 1.76 million jobs in July, beating analyst estimates of 1.5 million. This marks the third month of positive job figures after the economy lost a record 20 million jobs in March. The unemployment rate fell from 11.1% to 10.2%, while average hourly earnings rose by 0.2% after falling for two consecutive months.

• Europe’s ZEW economic sentiment, which aims to capture the view of institutional investors and analysts in the region, rose to 64 in August, a level not seen since April 2015.
• The U.S. consumer price index climbed 0.6% in July compared with June. However, year-over-year, inflation is up just 1%. Core inflation is up 1.6% year-over-year.

• 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.

• With ongoing improvement in all economic indicators, markets have continued to post gains. Except for mid-cap shares, all indices rose more than 3%.

• Vanguard’s mid-cap index fund (VMCIX) climbed nearly 2%, representing the worst performance from the pack.

• Meanwhile, Vanguard’s small-cap index fund (VSCIX) rose 4%, which is the best performance from the broad U.S. equity indices.

• In fixed income assets, the picture was decidedly mixed, with three gainers and three losers.

• Vanguard’s investment-grade bonds fund (VWESX) declined 3.2%, as investors flew to riskier assets.

• At the same time, Vanguard’s short-term inflation-protected securities fund (VTAPX) was the best performer with an advance of 0.43%.

• In the major sectors, only two indices posted losses.

• Vanguard’s industrials sector fund (VINAX) surged nearly 8% as sentiment in the manufacturing industry improved.

• As another sign of investors embracing riskier assets, Franklin Templeton’s utilities fund (FKUQX) posted the worst performance, losing 0.68% over the past month.

• Foreign equities were all up, with the exception of Latin America.

• Fidelity’s Latin America fund (FLATX) was the only major foreign fund to post losses, down 0.8%.

• Meanwhile, T. Rowe Price’s Japanese fund (PRJPX) surged 6.4% after weeks of losses. The Japanese market is the best performer over the past two weeks.

• Alternative assets posted mixed gains.

• Vanguard’s real estate fund (VGSLX) lost 0.29%, as the sector was among the most hit by the pandemic.

• PIMCO’s commodity real return strategy fund (PCRIX) continues to be the best performer from the pack, with a rise of 3.75%.

The risk was on and safety was off over the past two weeks. U.S. equities, municipal bonds, and industrials all posted substantial gains. Meanwhile, investment-grade bonds and utilities recorded losses. However, some safe-haven assets such as Japanese shares delivered solid performance over the past two weeks, while risky assets in Latin America disappointed.

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Funds return data is for the period between July 31 and August 14.