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.

 

• The first week of 2020 has been marked by political chaos in the U.S. and a stock market that continued its rally that started last year.

• Trump supporters protested in front of Capitol Hill against Congress’ approval of President-elect Joe Biden’s electoral college win, arguing the election results were stolen. Protesters turned violent, storming Capitol Hill, in what was a historic and tragic event. Trump has been accused of inciting the violence as he continued to reject the results of the election, which he lost. Markets were largely unmoved by the events.

• The coronavirus pandemic seems to be unstoppable. There are now 23 million people infected with the coronavirus in the U.S., more than double that of the runner-up, India, which recorded 8.1 million cases. The pace of daily cases has continued to rise both in the U.S. and globally. On January 8, the U.S. registered a record-new 307,000 cases.

• The U.K. finally broke out of the European Union, four years after a referendum on the membership that was won marginally by those favoring an exit. Fortunately, the U.K. and the EU secured a trade deal at the last minute, avoiding a potential trade disaster. Pundits still believe that the U.K. exit will have a detrimental effect on the U.K. economy over the long term.

• Sentiment in European manufacturing has been in expansion mode, despite the second wave of the pandemic leading to lockdowns across the board. Spanish, Italian and German manufacturing purchasing managers’ indexes are all in positive territory, with Germany’s PMI reaching a three-year high.

• British manufacturing PMI rose slightly in January to 57.5, also a three-year high.

• Meanwhile, a bunch of services PMI in Europe have shown a deteriorating sentiment, with France, Germany, Italy and France all in negative territory. This is largely due to government-mandated lockdowns.

• Manufacturing PMI in the U.S. hit a two-year high of 60.7 in January, jumping from 57.5 in the prior month.

• The U.S. Federal Reserve will continue to buy as much as $120 billion in bonds per month until it sees substantial progress in reaching its goals for inflation and employment, the minutes from its last meeting showed.

• The U.S. economy has lost 140,000 jobs in December, the first decline since May 2020, when most of the country self-isolated. Average hourly earnings jumped by 0.8% in December, the highest advance since May. Meanwhile, the unemployment rate stayed still at 6.7%.

• 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 markets continued to rally into the new year.

• Vanguard’s small-cap index fund (VSCIX) is up 4.40%, the strongest performance from the pack after the index recorded the best advance last year.

• Wilshire 5000 Index fund (WFIVX) is the worst performer, with a rise of just 1.46%.

• Most fixed-income assets were down.

• Vanguard’s long-term investment-grade bonds fund (VWESX) lost 5.8%, as investors embraced risk and moved into junk bonds.

• At the same time, Vanguard’s short-term inflation-protected securities fund (VTAPX) gained 0.35%, which is the best performance.

• Most sectors posted relatively strong performances.

• Vanguard’s materials sector fund (VMIAX) was up 7.4% for the past two weeks, by far the best performance.

• At the other end of the spectrum was Vanguard’s real estate stocks fund (VGSLX), which fell 1.6%.

• Foreign equities were all up.

• After a strong year, Fidelity’s China fund (FHKCX) was by far the best performer this year from the lot, surging 9.6% over the past two weeks.

• Fidelity’s Latin America fund (FLATX) posted the weakest gain, moving up by just 1.4%.

• Alternative assets’ performance was weak.

• Pimco’s Commodities fund (PCRIX) was up 4.5%, representing the best performance from the pack.

• At the same time, Vanguard’s real estate index fund (VGSLX) shed 1.6% over the past two weeks and was the only faller.

Broad markets continued to rally into the new year, along with materials stocks, Chinese shares, and commodities, with all three indices posting the strongest performance from their respective segments. Meanwhile, investment-grade bonds and real estate assets shares were among the few that started the year with losses.

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Fund returns are for the period between December 24, 2020 and January 8, 2021.