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 number of global coronavirus cases has continued to trend down over the past two weeks. The U.S. remains the leader with 29 million cases so far, followed by India, Brazil, and Russia. Several studies have shown that mass vaccinations will stop the spread of the disease, most likely making way for a return to normal in the coming months.

• U.S. consumer price inflation rose 0.3% month-over-month in January, thanks to increases in food prices, utility services, and used cars and trucks. For the 12 months ended January 2021, inflation advanced 1.4%, still below the Federal Reserve’s target of 2%. Core CPI was also up 1.4%, down from 1.6% in December.

• Investors’ inflation expectations are quite high. The yield on 10-year government bonds continued to rise over the past month, from 1.03% to 1.35%, as investors are pricing in higher inflation, which is likely to prompt the Federal Reserve to raise interest rates in the near future.

• U.S. retail sales advanced 5.3% in January 2021, following a revised drop of 1% in December. Compared with the same month last year, retail sales were up 7.4%.

• Crude oil inventories have registered a decline for four weeks in a row. For the week ended February 18, crude stockpiles fell by 7.3 million, compared with a drop of 2.1 million expected by analysts. This follows a drop of nearly 17 million barrels in the prior three weeks.

• UK retail sales fell by 8.2% in January, largely due to movement restrictions imposed by the government. The abrupt decline follows a tepid growth of 0.3% in December.

• A gauge of European purchasing managers in the services sector declined from 45.4 to 44.7, remaining in contraction territory for the sixth month in a row. Meanwhile, European manufacturing PMI surged from 54.8 to 57.7.

• 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.

• U.S. equities have continued their advance over the past two weeks.

• Vanguard Mid-Cap Index Fund (VMCIX) is again the best performer from the pack, staging an advance of 2.6%.

• Vanguard 500 Index Fund (VFIAX) posted the worst performance for two consecutive fortnights, this time rising 0.59%.

• Fixed income assets were almost all down, as yields continued to increase thanks to inflation expectations.

• Vanguard Long-Term Investment-Grade Fund (VWESX) fell 1.69% for the past two weeks, by far the worst performance from the pack.

• Vanguard High-Yield Corporate Fund (VWEHX) has been the best performer, with flat returns over the past two weeks.

• Sectors were rather mixed.

• Vanguard Financials Index Fund (VFAIX) climbed 4.76% over the past two weeks, representing the best performance from the pack. Financials equities were boosted by rising yields and expectations for higher interest rates.

• Franklin Utilities Fund (FKUQX) declined 2.69% for the past two weeks, the worst performer from the bunch.

• Foreign equities were rather mixed.

• Fidelity China Region Fund (FHKCX) surged 5.6% over the past two weeks, the best performer from foreign equities.

• Fidelity Latin America Fund (FLATX) declined 0.22%, the only faller from the pack.

• Alternative assets’ performance was mixed.

• PIMCO CommodityRealReturn Strategy Fund (PCRIX) was up 3.32%, representing the best performance.

• Meanwhile, Cohen & Steers Preferred Securities and Income Fund (CPXIX) was again the worst performer, with a decline of 0.14%.

Mid-cap stocks have again outperformed this week, although the performance of the broad market remained solid. Rising Treasury yields have lifted financials equities, which are expected to benefit from higher interest rates. As yields rose, bonds were hammered. Commodities also recorded decent performances, but preferred securities were down.

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Fund returns data are for the two-week period between February 5, 2021, to February 19, 2021.