Every fortnight, MutualFunds.com provides a snapshot of the performance of some key mutual funds and ETFs to highlight the trending sectors, geographic regions, and asset classes. MutualFunds.com uses a system to automatically scan through thousands of relevant securities and, to ensure quality and adequate track record, places a minimum threshold on net assets ($1 billion for mutual funds and $500 million for ETFs). The best and worst performers are further discussed in the report along with key economic highlights from the past fortnight, reminding you to adjust your portfolios, if required.

The market has continued its poor performance over the past two weeks, with the leading U.S. indices being slammed due to high inflation expectations combined with recession worries and fears of a protracted war in Ukraine. Aside from energy stocks, the market has been bleeding red.

US Broad mostly includes funds focused on US equities and can cover different investing styles (growth/value) and market capitalizations (small/mid/large). Fixed Income includes funds focused on debt securities and can cover different geographies (US/foreign) and security types (corporate/municipal/high-yield/investment-grade/government/structured). Alternatives cover funds focused on non-traditional investment strategies (currency, hedge fund strategy, derivatives), leveraged/structured products, real estate, and commodities. Dividend funds focus on generating income via equities and not through debt.

 

U.S. Broad

Only one index fund was in the green these past two weeks in the U.S., namely a value fund managed by Smead Funds. Growth funds took a beating, with a Morgan Stanley institutional growth fund down more than 17%.

 

Top Performers

 

• Mutual Funds: Smead Value Fund (SMVLX) , up 0.43%.

 

Worst Performers

 

• Mutual Funds: Morgan Stanley Institutional Fund, Inc. Growth Portfolio (MSEGX) , down -17.4%, and Delaware Smid Cap Growth Fund (DFCIX), down -17.11%.

• ETFs: First Trust US Equity Opportunities ETF (FPX) , down -8.78%, and iShares Russell 2000 Growth ETF (IWO), down -8.1%.

 

Dividend

The performance picture was similar in dividend funds. Only one ETF managed to make a small gain of 0.38% over the past two weeks. At the other end of the spectrum, a Vanguard diversified equity fund lost 5.5%.

 

Top Performers

 

• ETFs: WisdomTree U.S. High Dividend Fund (DHS) , up 0.38%.

 

Worst Performers

 

• Mutual Funds: Vanguard Diversified Equity Fund (VDEQX) , down -5.44%, and BlackRock Global Dividend Portfolio (BIBDX), down -4.46%.

• ETFs: ProShares Russell 2000 Dividend Growers ETF (SMDV) , down -4.73%, and O’Shares U.S. Quality Dividend ETF (OUSA), down -3.49%.

 

Fixed Income

In fixed income assets, there were more outperformers as shorter duration funds tend to attract increased interest when the broader market goes down. Funds shorting longer-duration Treasuries and short-term government bond-focused funds outperformed others in this group.

 

Top Performers

 

• Mutual Funds: Eaton Vance Short Duration Government Income Fund (EILDX) , up 0.25%, and Sierra Tactical Core Income Fund (SSIIX), up 0.05%.

• ETFs: ProShares UltraShort 20+ Year Treasury (TBT) , up 12.67%, and ProShares Short 20+ Year Treasury (TBF), up 6.3%.

 

Worst Performers

 

• Mutual Funds: PIMCO StocksPLUS® Long Duration Fund (PSLDX) , down -8.89%, and PIMCO Extended Duration Fund (PEDPX), down -8.76%.

• ETFs: PIMCO 15+ Year U.S. TIPS Index Exchange-Traded Fund (LTPZ) , down -6.77%, and iShares Convertible Bond ETF (ICVT), down -6.35%.

 

Sector

The energy sector has been by far the best performer from the pack, as the Ukraine war and Russian sanctions have put pressure on the oil and gas market. Both the technology and biotechnology sectors have continued to bleed, with many funds posting double-digit losses.

 

Top Performers

 

• Mutual Funds: Fidelity® Select Energy Portfolio (FSENX) , up 12.46%, and Vanguard Energy Index Fund (VENAX), up 11.55%.

• ETFs: Direxion Daily Energy Bull 2X Shares (ERX) , up 25.73%, and Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2X Shares (GUSH), up 17.34%.

 

Worst Performers

 

• Mutual Funds: T. Rowe Price Global Technology Fund (PRGTX) , down -13.4%, and Rydex NASDAQ-100® 2x Strategy Fund (RYVLX), down -12.85%.

• ETFs: Direxion Daily S&P Biotech Bull 3X Shares (LABU) , down -39.45%, and iShares Mortgage Real Estate Capped ETF (REM), down -35.29%.

 

Foreign

Chinese shares have been among the best performers, as the market recovered somewhat after steep losses in previous weeks. The outperformance was likely due to a signal from the nation’s top leaders that economic stimulus could be forthcoming. Sweden, Brazil and Switzerland were among the worst performers.

 

Top Performers

 

• Mutual Funds: Matthews China Fund (MCHFX) , up 1.79%.

• ETFs: KraneShares Bosera MSCI China A ETF (KBA) , up 1.02%, and Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR), up 0.83%.

 

Worst Performers

 

• Mutual Funds: Franklin International Growth Fund (FNGZX) , down -9.45%, and PGIM Jennison International Opportunities Fund (PWJQX), down -9.09%.

• ETFs: iShares MSCI Sweden ETF (EWD) , down -8.41%, and iShares MSCI Brazil ETF (EWZ), down -8.07%.

 

Alternatives

Alternative funds have continued to post strong performance, with funds focused on volatility strategies and commodities among the best performers.

 

Top Performers

 

• Mutual Funds: AlphaSimplex Managed Futures Strategy Fund (AMFAX) , up 6.39%, and AQR Managed Futures Strategy Fund (AQMIX), up 4.67%.

• ETFs: ProShares Ultra VIX Short-Term Futures ETF (UVXY) , up 17.04%, and iShares S&P GSCI Commodity-Indexed Trust (GSG), up 5.59%.

 

Worst Performers

 

• Mutual Funds: Janus Henderson Contrarian Fund (JCNCX) , down -6.86%, and Columbia Convertible Securities Fund (COVRX), down -5.97%.

• ETFs: ProShares Ultra Silver (AGQ) , down -11.53%, and ProShares Short VIX Short-Term Futures ETF (SVXY), down -7.97%.

 

ESG

ESG funds have again posted a disappointing performance.

 

Worst Performers

 

• Mutual Funds: Brown Advisory Sustainable Growth Fund (BAFWX) , down -6.95%, and Neuberger Berman Sustainable Equity Fund (NRAAX), down -5.69%.

• ETFs: iShares MSCI KLD 400 Social ETF (DSI) , down -4.34%, and Xtrackers MSCI USA ESG Leaders Equity ETF (USSG), down -4.31%.

 

Among major economic data released during the last 2 weeks, the U.S. Federal Reserve has increased interest rates by half a percentage point to 1% as it seeks to crush raging inflation. The Bank of England has also raised interest rates by 0.25% to 1% due to inflation threats in the economy.

The U.S. GDP declined 1.4% in the first three months of the year, marking a reversal of the strong post-Covid economic recovery. The war in Ukraine and rising interest rates have hit investor demand.

European inflation rose slightly in April to 7.5%, putting additional pressure on the European Central Bank to act more decisively.

The U.S. labor market is getting hotter, with 428,000 new jobs added in April. The unemployment rate stayed flat at 3.6%, which is indicative of full employment.

In a further sign of a global slowdown, Chinese manufacturing and non-manufacturing purchasing managers’ indices moved further into contraction territory.

Fund performance data is calculated for the period between April 29 and May 6.