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.

 

• Donald Trump has reluctantly conceded the U.S. presidential race to Joe Biden, while indicating he will continue mounting legal action against what he claims was widespread election fraud. His efforts have so far proved futile, as most courts swiftly threw out cases due to lack of evidence.

• Meanwhile, Joe Biden is hard at work to form his cabinet. Former Federal Reserve chairwoman Janet Yellen is currently Biden’s pick to become Treasury Secretary, while former Secretary of State John Kerry will become a special envoy on climate change.

• Global coronavirus cases have continued to rise over the past two weeks, with the U.S. reporting nearly 13 million cases, followed by India with nine million and Brazil with six million. National lockdowns have continued to disrupt the economic life of European countries, even as the number of daily infections continue to stay high.

• However, there is a light at the end of the tunnel. Pfizer is moving forward with a coronavirus vaccine, while Moderna, another biopharmaceutical company, reported strong results with its own vaccine, which is believed to be more resistant to higher temperatures and easier to transport. U.K.-based AstraZeneca also revealed encouraging results for a vaccine.

• U.S. retail sales have disappointed analysts, rising 0.3% month-over-month in October. Pundits had expected growth of 0.5% after sales grew by 1.6% in the prior month. Core retail sales were worse, increasing by 0.2% versus expectations of 1.6%.

• U.S. housing starts have blown through expectations and beat the September figure by some distance. In October, 1.53 million housing permits were issued, compared with expectations of 1.45 million.

• U.S. unemployment claims have continued to decline, coming in below the 800,000 level for the fifth consecutive week. Still, a lot of progress needs to be made to reach pre-pandemic levels of less than 300,000 claims per week.

• Eurozone services purchasing managers’ index (PMI) fell deeper into contraction territory at 41.3, as the lockdown measures to stem the number of coronavirus infections had primarily a toll on services. Germany’s services PMI has held up well at 46.2, but France’s declined to 38, the lowest level since April.

• At the same time, the Eurozone’s manufacturing PMI is expanding, as most industries continue to work at full capacity. A PMI figure of 53.6 beat expectations of 53.2, although the number was lower than the prior month’s 54.8. The sentiment was uneven across Europe, with France’s falling in contraction territory and Germany’s well in expansion territory and actually beating expectations.

• 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.

• Despite mixed news overall, stock markets have posted a broad rally. The news of the vaccine has prompted a movement of funds from stocks benefitting from the stay-at-home economy like technology to ones that will benefit from a return to normal like real estate and airlines.

• Vanguard’s small-cap index fund (VSCIX) was by far the best performer, surging 6.83% over the past two weeks.

• Vanguard’s large-cap index fund (VFIAX) was the worst performer, rising only 1.49%.

• Fixed income assets were all up with one exception.

• Vanguard’s investment-grade bonds fund (VWESX) was again the best performer from the pack with an advance of 2.2%.

• Meanwhile, Vanguard’s short-term Treasuries fund (VFISX) remained flat.

• Sectors were almost all up.

• Crude oil prices have advanced this week, giving a rare respite to the energy sector. Vanguard’s energy sector fund (VGENX) surged more than 11% for the past two weeks, representing the best performance.

• The T. Rowe Price’s Communications and Technology sector fund (PRMTX) was the worst performer in light of the successful COVID-19 vaccines. The index fell 2.27%.

• Foreign equities were all up.

• Fidelity’s Latin American fund (FLATX) posted the best performance, rising 7.25%, boosted by climbing oil prices.

• At the other end of the spectrum was Vanguard’s Emerging Markets Fund (VEMAX), which was up just 2.21%.

• All alternative assets have posted gains.

• Vanguard’s real estate fund (VGSLX) was the best performer by a long shot, climbing nearly 6%.

• Pimco’s Emerging market currencies fund (PLMIX) was the worst performer this time, falling 1.27%.

As the development of three effective coronavirus vaccines has prompted hope that life will return to normal, investors have taken money out of stocks benefitting from the pandemic. The communications and technology sector was among the few losers these past two weeks along with short-term Treasuries, which remained flat. At the same time, investors moved money into stocks that will benefit from a return to normal, including energy shares, real estate assets, and small-cap stocks.

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Fund performance is for the period between November 6, 2020 and November 20, 2020.