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.

 

• With the cold season approaching in the northern hemisphere, the coronavirus pandemic’s second act is in full swing. Daily cases are rising across Europe, and some countries have experienced record levels of new infections. On the bright side, the number of severe illnesses is down proportionally, although still rising in absolute terms.

• As of September 12, there were 38 million registered cases of coronavirus globally, with daily cases hitting a high of 368,000 on October 10. Officials fear that together with flu season, the pandemic will put pressure on countries’ health systems. This has prompted governments around the world to weigh new restrictions on the movement of people.

• In the U.S., the presidential campaign is gathering steam, after President Donald Trump tested positive for the coronavirus and had to be hospitalized. Trump is feeling well, having tested negative recently, and is ready to go back on the campaign trail.

• The U.S. Federal Reserve will meet in November to discuss ways to change the asset purchase program. This could include an increase in purchases or a shift in what the Federal Reserve buys, perhaps toward bonds of longer maturities.

• U.S.’ ISM manufacturing purchasing managers’ index (PMI) fell 0.6 points to 55.4 but is still in expansion territory for the fourth consecutive month.

• The U.S. economy generated 661,000 jobs in September, after adding 1.4 million jobs in the prior month. The figure is well below analyst estimates of 900,000. The unemployment rate declined to 7.9% from 8.4% previously, beating estimates of 8.2%.

• Average hourly earnings had been expected to rise by 0.5% in September, but they only rose by 0.1%.

• After two consecutive months of positive readings, European services PMI fell into negative territory at 48, in part because of new restrictions on parts of the services sector, including hotels, bars, and restaurants.

• However, the sentiment in the U.S. services sector continues to be in great shape. ISM services PMI increased 0.9 points to 57.8, beating economists’ estimates of 56.3.

• 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.

• The broad market rallied these past two weeks, despite worries that the second wave of coronavirus will lead to new lockdowns.

• Vanguard’s small-cap index fund (VSCIX) surged nearly 10%, marking by far the best performance from the pack.

• The S&P 500 Index fund(VFIAX) was the worst performer, with a rise of just over 5%.

• Fixed income assets were all down, with the exception of risky bonds.

• Vanguard’s high-yield bonds fund (VWEHX) climbed 1.57% over the past two weeks, the only gainer from the pack.

• At the same time, Vanguard’s investment-grade bonds fund (VWESX) declined 0.92%, as investors sold off safe-haven assets.

• All sectors were up.

• Vanguard’s financials sector fund (VFAIX) posted the best performance these past two weeks, up an impressive 8.43%.

• Vanguard’s energy sector fund (VGENX), a perennial loser, benefitted the least from the broad market rally, advancing just 3.26%.

• Foreign equities have all posted gains.

• Matthew’s India equities fund (MINDX) was the best performer from the pack, with a rise of 7.4%.

• At the other end of the spectrum is Fidelity’s Latin America fund (FLATX), which is up just a little more than 2%.

• Alternative assets were all up.

• Embattled real estate equities represented by Vanguard’s real estate fund (VGSLX) has finally recovered, posting the best gain from the pack, up 6.85%.

• Cohen and Steers’ preferred shares fund (CPXIX) gained just around 1%, and is the worst performer.

The broad market has recovered strongly over the past two weeks, despite worries that a second wave of the coronavirus pandemic will kill the economic recovery. Small-cap equities have been among the key gainers, along with financials, high yield bonds, and Indian shares. The energy sector and Latin America posted the weakest gains, while investment-grade bonds led the declines in fixed income.

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Funds return data is for the period between September 25 and October 9.