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.

Stock markets across the globe have maintained their relatively strong performance, despite ever-more ominous signs that a recession is coming soon. Technology stocks have finally rebounded after weeks of poor performance. Commodities have continued to outperform due to the ongoing conflict in Ukraine.

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

Small-caps have again outperformed as investors shunned large companies that are typically more connected to the global economy and disruptions to supply chains. To the bright side, most underperformers have also posted marginal gains over the last fortnight.

 

Top Performers

 

• Mutual Funds: Bridgeway Omni Small-Cap Value Fund (BOSVX) , up 8.44%, and Invesco Small Cap Value Fund (VSMIX), up 7.96%.

• ETFs: Invesco S&P SmallCap 600 Revenue ETF (RWJ) , up 7.42%, and Invesco Dynamic Large Cap Growth ETF (PWB), up 7.26%.

 

Worst Performers

 

• Mutual Funds: American Funds Preservation Portfolio (PPFFX) , down -0.1%, and Spyglass Growth Fund (SPYGX), up 0.17%.

• ETFs: Pacer Trendpilot™ US Large Cap ETF (PTLC) , up 0.02%, and iShares Core S&P U.S. Value ETF (IUSV), up 4.58%.

 

Dividend

Dividend-focused funds recorded impressive results, with no fund posting a loss. Investors, unsurprisingly, preferred dividend growth stocks more than global dividend stocks.

 

Top Performers

 

• Mutual Funds: Lord Abbett Dividend Growth Fund (LAMYX) , up 5.93%, and Invesco Rising Dividends Fund (ONRDX), up 5.76%.

• ETFs: First Trust Rising Dividend Achievers ETF (RDVY) , up 6.26%, and Invesco BuyBack Achievers ETF (PKW), up 6.14%.

 

Worst Performers

 

• Mutual Funds: Principal Global Diversified Income Fund (PGBAX) , up 1.05%, and Federated Hermes Strategic Value Dividend Fund (SVAIX), up 2.56%.

• ETFs: Invesco S&P Ultra Dividend Revenue ETF (RDIV) , up 1.82%, and Invesco S&P 500® High Dividend Low Volatility ETF (SPHD), up 1.88%.

 

Fixed Income

The performance of fixed-income funds was more disparate, with a good chunk of negative and positive gains. High-yield municipal bonds and inflation-tackling bond funds were among the best performers, while longer duration bond funds suffered due to rising interest rate risks.

 

Top Performers

 

• Mutual Funds: Nuveen High Yield Municipal Bond Fund (NHCCX) , up 6.1%, and Nuveen California High Yield Municipal Bond Fund (NCHRX), up 5.88%.

• ETFs: Horizon Kinetics Inflation Beneficiaries ETF (INFL) , up 6.26%, and SPDR® Nuveen S&P High Yield Municipal Bond ETF (HYMB), up 4.19%.

 

Worst Performers

 

• Mutual Funds: PIMCO Extended Duration Fund (PEDPX) , down -2.69%, and Vanguard Extended Duration Treasury Index Fund (VEDIX), down -2.45%.

• ETFs: VanEck Vectors High Yield Muni ETF (HYD) , down -11.11%, and SPDR® Portfolio Long Term Treasury ETF (SPTL), down -2.14%.

 

Sector

Technology funds were by far the best performers from the pack, followed by energy sector funds. Funds focused on biotechnology and cannabis have disappointed again.

 

Top Performers

 

• Mutual Funds: ProFunds UltraNASDAQ-100 Fund (UOPIX) , up 11.91%, and Rydex NASDAQ-100® 2x Strategy Fund (RYVLX), up 11.9%.

• ETFs: Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2X Shares (GUSH) , up 38.66%, and Direxion Daily Technology Bull 3X Shares (TECL), up 20.34%.

 

Worst Performers

 

• Mutual Funds: Franklin Biotechnology Discovery Fund (FTDZX) , down -2.26%, and Fidelity Advisor® Biotechnology Fund (FBTAX), down -1.1%.

• ETFs: ProShares UltraPro Short QQQ (SQQQ) , down -18.34%, and iShares Mortgage Real Estate Capped ETF (REM), down -10.53%.

 

Foreign

Emerging market-based funds, including Chinese and Brazilian stocks, have posted strong performances over the past two weeks. At the other end of the spectrum are funds based on stocks in Singapore, Japan, and Russia, which experienced small declines.

 

Top Performers

 

• Mutual Funds: Lord Abbett Developing Growth Fund (LADVX) , up 6.03%, and Matthews China Fund (MCHFX), up 5.7%.

• ETFs: EMQQ The Emerging Markets Internet & Ecommerce ETF (EMQQ) , up 7.08%, and iShares MSCI Sweden ETF (EWD), up 5.71%.

 

Worst Performers

 

• Mutual Funds: DFA World ex U.S. Government Fixed Income Portfolio (DWFIX) , down -2.34%, and T. Rowe Price Japan Fund (RJAIX), down -1.15%.

• ETFs: iShares MSCI Singapore ETF (EWS) , down -1%, and iShares MSCI Japan ETF (EWJ), down -0.14%.

 

Alternatives

Funds using contrarian strategies along with commodities/natural resources and volatility managing strategies have been the best performers from the pack. On the contrary, funds focused on agriculture and mortgage-backed securities have been hit.

 

Top Performers

 

• Mutual Funds: Columbia Contrarian Core Fund (SMGIX) , up 5.29%, and Fidelity® Contrafund® Fund (FCNKX), up 5.18%.

• ETFs: iShares GSCI Commodity Dynamic Roll Strategy ETF (COMT) , up 6.93%, and Invesco DB Commodity Index Tracking Fund (DBC), up 6.87%.

 

Worst Performers

 

• Mutual Funds: Semper MBS Total Return Fund (SEMPX) , down -1.56%, and Columbia Mortgage Opportunities Fund (CLMAX), down -1.45%.

• ETFs: ProShares Ultra VIX Short-Term Futures ETF (UVXY) , down -15.93%, and ETFMG Alternative Harvest ETF (MJ), down -7.11%.

 

ESG

All ESG funds have posted positive performances over the past fortnight, in a rare occurrence since the start of the year.

 

Top Performers

 

• Mutual Funds: Brown Advisory Sustainable Growth Fund (BAFWX) , up 6.63%, and American Century Sustainable Equity Fund (AFDAX), up 6.31%.

• ETFs: Xtrackers S&P 500 ESG ETF (SNPE) , up 5.61%, and iShares MSCI KLD 400 Social ETF (DSI), up 5.53%.

 

Worst Performers

 

• Mutual Funds: PIMCO Total Return ESG Fund (PTGCX) , up 0.37%, and Neuberger Berman Sustainable Equity Fund (NRAAX), up 4.13%.

• ETFs: Xtrackers MSCI USA ESG Leaders Equity ETF (USSG) , up 5.2%, and iShares MSCI KLD 400 Social ETF (DSI), up 5.53%.

 

Among major economic data released during the last two weeks, European manufacturing and services PMI (purchasing managers’ index) have continued to decline, although they remained in positive territory. A similar picture emerged in U.S. manufacturing and services PMIs, with the sentiment declining but remaining in territory indicating expansion.

The U.S. Federal Reserve minutes showed that policymakers believe the economy remains strong and expect to raise interest rates at further meetings. At its last meeting, the central bank raised rates by 50 basis points, 25 basis points higher than usual, as policymakers are seeking to tame runaway inflation.

U.S. GDP fell 1.5% in the first three months of the year, disappointing analysts who expected a smaller decline. The U.S. job market remains red hot, with 390,000 jobs added in May and average hourly earnings jumping 0.3%. The U.S. unemployment rate continues to hover around the 3.6% mark.

Eurozone inflation rose to 8.1% in May year-over-year, compared with 7.4% in the prior month, largely due to higher energy prices.

Fund performance data is calculated for the period between May 20 and June 3.