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.

Markets have broadly recovered over the past two weeks, as optimism was triggered by the U.S. Federal Reserve hinting that it might soften the pace of interest rate increases as economic data is deteriorating and there are some signs inflation is peaking. Growth equities have outperformed, along with long duration bonds, while volatility instruments and commodities have underperformed.

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

U.S. small- and mid-cap growth equity funds have posted gains, with many in double-digit territory. At the same time, the worst performers have also recorded small gains.

 

Top Performers

 

• Mutual Funds: Columbia Mid Cap Growth Fund (CLSPX) , up 12.21%, and Brown Capital Management Small Company Fund (BCSIX), up 11.91%.

• ETFs: iShares S&P Mid-Cap 400 Growth ETF (IJK) , up 10.67%, and SPDR® S&P 400 Mid Cap Growth ETF (MDYG), up 10.65%.

 

Dividend

In mutual funds and ETFs geared toward dividends, small-caps have been the best performers. Meanwhile, even the worst performers posted gains of at least 2%.

 

Top Performers

 

• Mutual Funds: Principal Small-MidCap Dividend Income Fund (PMDIX) , up 9.28%, and Franklin Rising Dividends Fund (FRDPX), up 8.13%.

• ETFs: ProShares Russell 2000 Dividend Growers ETF (SMDV) , up 8.19%, and WisdomTree U.S. SmallCap Dividend Fund (DES), up 7.7%.

 

Worst Performers

 

• Mutual Funds: Principal Global Diversified Income Fund (PGBAX) , up 2.07%, and Federated Hermes Strategic Value Dividend Fund (SVAIX), up 2.16%.

• ETFs: Invesco S&P Ultra Dividend Revenue ETF (RDIV) , up 3.79%, and Invesco S&P 500® High Dividend Low Volatility ETF (SPHD), up 3.96%.

 

Fixed Income

Long-term, emerging market, and inflation-linked bonds have been the best performers these past two weeks. Meanwhile, funds shorting U.S. Treasuries have posted negative gains.

 

Top Performers

 

• Mutual Funds: PIMCO StocksPLUS® Long Duration Fund (PSLDX) , up 11%, and Stone Harbor Emerging Markets Debt Fund (SHMDX), up 6.82%.

• ETFs: Horizon Kinetics Inflation Beneficiaries ETF (INFL) , up 9.17%, and iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB), up 6.38%.

 

Worst Performers

 

• Mutual Funds: T. Rowe Price Dynamic Global Bond Fund (TRDZX) , down -1.93%, and Eaton Vance Short Duration Government Income Fund (EILDX), down -0.26%.

• ETFs: ProShares UltraShort 20+ Year Treasury (TBT) , down -4.55%, and ProShares Short 20+ Year Treasury (TBF), down -2.25%.

 

Sector

The broader technology sector and semiconductors have jumped double digits. At the other end of the spectrum were ETFs shorting technology stocks.

 

Top Performers

 

• Mutual Funds: Rydex NASDAQ-100® 2x Strategy Fund (RYVLX) , up 18.2%, and ProFunds UltraNASDAQ-100 Fund (UOPIX), up 18.18%.

• ETFs: Direxion Daily Semiconductor Bull 3X Shares (SOXL) , up 32.91%, and Direxion Daily Technology Bull 3X Shares (TECL), up 31.09%.

 

Worst Performers

 

• Mutual Funds: Matthews Asia Innovators Fund (MATFX) , down -0.2%, and Fidelity Advisor® Biotechnology Fund (FBTAX), up 0.27%.

• ETFs: ProShares UltraPro Short QQQ (SQQQ) , down -24.69%, and iShares Mortgage Real Estate Capped ETF (REM), down -19.05%.

 

Foreign

ETFs focusing on countries like Brazil, Sweden, and Latin America have posted solid advances, while Chinese shares have been rather weak.

 

Top Performers

 

• Mutual Funds: Fidelity® International Capital Appreciation Fund (FIVFX) , up 10.37%, and Fidelity Advisor® International Cap Appreciation Fund (FCPAX), up 10.32%.

• ETFs: iShares MSCI Brazil ETF (EWZ) , up 11.79%, and iShares MSCI Sweden ETF (EWD), up 10.57%.

 

Worst Performers

 

• Mutual Funds: Matthews China Fund (MCHFX) , down -4.11%, and Fidelity® China Region Fund (FHKCX), down -2.19%.

• ETFs: WisdomTree China ex-State-Owned Enterprises Fund (CXSE) , down -4.96%, and iShares MSCI China ETF (MCHI), down -4.72%.

 

Alternatives

Contrarian funds have shown decent gains and have been among the best performers, along with silver and natural resource-focused funds. Meanwhile, volatility ETFs have been pummelled, with the worst performer losing more than 20%.

 

Top Performers

 

• Mutual Funds: Fidelity® Contrafund® Fund (FCNKX) , up 7.37%, and Janus Henderson Contrarian Fund (JCNCX), up 7.16%.

• ETFs: ProShares Ultra Silver (AGQ) , up 17.8%, and VanEck Vectors Agribusiness ETF (MOO), up 9.49%.

 

Worst Performers

 

• Mutual Funds: AlphaSimplex Managed Futures Strategy Fund (AMFAX) , down -6.3%, and PIMCO TRENDS Managed Futures Strategy Fund (PQTIX), down -5.49%.

• ETFs: ProShares Ultra VIX Short-Term Futures ETF (UVXY) , down -20.25%, and Invesco DB Agriculture Fund (DBA), up 0.6%.

 

ESG

As expected, ESG funds have been in vogue, with none of them reporting losses.

 

Top Performers

 

• Mutual Funds: Brown Advisory Sustainable Growth Fund (BAFWX) , up 11.85%, and Putnam Sustainable Leaders Fund (PNOPX), up 9.19%.

• ETFs: iShares MSCI KLD 400 Social ETF (DSI) , up 7.84%, and Xtrackers S&P 500 ESG ETF (SNPE), up 7.54%.

Among major economic data released during the last two weeks, the U.S. Federal Reserve raised interest rates by another 75 basis points, but Fed Chair Jerome Powell declined to provide guidance on further rate increases. This has triggered speculation that the U.S. central bank might cool interest rate rises as economic data weakens and signs emerge that inflationary expectations are getting anchored.

Preliminary data showed that U.S. GDP declined 0.9% in the second quarter, after falling 1.6% in the first three months.

The European Central Bank (ECB) raised interest rates to 0.5% from zero, following in the footsteps of the Fed, as surging inflation has worried policymakers.

European business sentiment is deteriorating rapidly, with manufacturing purchasing managers’ index (PMI) falling below 50, which indicates contraction, for the first time since the pandemic. Services PMI is still in expansion territory but is dangerously close to falling below 50.

Euro-zone inflation rose from 8.6% to 8.9% in July, although core inflation came in at a more tame 4%.

U.K. inflation surged to 9.4% in July from 9.1% previously, slightly higher than analysts had expected.

The Bank of Japan kept interest rates at a record-low level, the only bank in the developed world that is maintaining its accommodative monetary policy in the face of rising inflation.

Fund performance data is calculated for the period between July 15 and July 29.