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 U.S. is making good progress on vaccinating its population, with 125 million people already taking their first dose. The UK is also moving pretty well, with nearly half its population already being administered the first jab. The UK and the U.S. are in the top five countries in the world that have made the best progress on mass immunizations against COVID-19. At the same time, vaccination efforts are badly lagging in Continental Europe, which has had a host of troubles with some vaccines, including lethal side-effects from an AstraZeneca-Oxford jab.

• U.S. inflation rose 1.7% in February over the past 12 months, still below the Federal Reserve’s target of 2%. Core inflation, which excludes volatile items like food and energy, advanced just 1.3% for the year. The Federal Reserve has repeatedly indicated that it will let inflation run past the 2% mark before mulling a tightening of its monetary policy. However, markets are betting interest rates will rise quicker, judging by the steep rise in government bond yields this year.

• The U.S. Federal Reserve has once again made it clear that it will not raise interest rates at least before 2023, despite raising its forecasts for inflation and economic growth and accelerating Treasury yields. The Fed kept interest rates at record low levels of zero and will continue to buy at least $120 billion in assets per month.

• The European Central Bank has increased purchases of Eurozone debt, as a selloff in the region’s bond markets has increased borrowing costs. Investors have been betting that a quick economic recovery will lead to a rise in inflation and yields, especially in the U.S., which is making good progress on vaccinations and might fully open soon.

• U.S. oil stockpiles have been increasing for four consecutive weeks. For the four weeks ended March 17, the U.S. added nearly 40 million barrels, way above expectations.

• U.S. retail sales declined 3% month-over-month in February, after an advance of 7.65% in the prior month. Core retail sales, which excludes volatile items like automobiles, dropped 2.7%, after surging 8.3% in the prior month. Economists had expected a much smaller fall for both indexes.

• The Bank of England and the Bank of Japan have also kept their monetary policies steady, including maintaining interest rates at record low levels. The Bank of England raised its forecast for economic growth, as the UK is close to opening its economy. Meanwhile, the Bank of Japan has dumped its promise to acquire 6 trillion yen in equities per year, as it favors a more sustainable policy to boost economic output.

• 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 resumed their rally these past two weeks, after a brief pause in the prior fortnight.

• Vanguard Small-Cap Index Fund (VSCIX) is the best performer from the pack with an advance of 3.46%.

• Meanwhile, Vanguard 500 Index Fund (VFIAX) posted the worst performance, climbing just 1.92%.

• Fixed income assets were mostly down.

• Vanguard Short-Term Inflation-Protected Securities Index Fund (VTAPX) again was the only riser from the bunch, up just 0.08%.

• At the same time, Vanguard Long-Term Investment-Grade Fund (VWESX) fell 1.97%, by far the worst performance from the bunch.

• Sectors were all up, with only one index posting losses.

• Vanguard Consumer Discretionary Index Fund (VCDAX) surged 5.94% over the past two weeks, lodging the best performance.

• Meanwhile, Vanguard Energy Fund (VGENX) recorded the only loss, down by 0.37%.

• Foreign equities were rather mixed.

• Fidelity Latin America Fund (FLATX) climbed 2.45%, clinging to the title of the best performer.

• Meanwhile, Matthews India Fund (MINDX) is the worst performer, declining 1.40%.

• Alternative assets’ performance was mixed.

• PIMCO CommodityRealReturn Strategy Fund (PCRIX) was the only asset class that lost these past two weeks, down 1.52%.

• At the other end of the spectrum, Vanguard Real Estate Index Fund (VGSLX) is up 4.13% for the past two weeks, the best performer from the pack.

Equities have resumed their rally this week. Small-cap equities, consumer discretionary stocks, and real estate equities have enjoyed strong returns these past two weeks. At the same time, commodities, Indian shares, and investment-grade bonds have posted losses.

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