Market activity was light last week due to the Memorial Day holiday, with the major indices trending flat.
Tech stocks helped pull the averages lower as Salesforce reported lower growth in its latest earnings announcement. A drop in Treasury yields on the week, however, helped stem the declines. Energy stocks got a boost when ConocoPhillips agreed to buy Marathon Oil. In terms of economic data, the Federal Reserve’s favorite inflation metric, the Core PCE Price Index, came in at 0.2%, matching analyst forecasts but below previous readings. This gives the central bank more leeway to cut interest rates. Personal spending and income data also clocked in as bullish, indicating that the consumer economy is still in decent shape. Meanwhile, the U.S. economy grew at just 1.3% during the first quarter of this year, further boosting expectations of an interest rate cut later this summer.
While investors may be excited to get their summer break started, there will be plenty of data released next week that could make markets volatile. This includes the latest ISM Manufacturing report. After a slight contraction in April, analysts are now predicting a small increase back into expansion territory in May. If the reading comes in much stronger than expected, however, it could throw cold water on any rally as the Federal Reserve will likely keep interest rates paused for longer. The same could be said for the latest Job Openings and Labor Turnover Survey (JOLTS), which will be released Wednesday. The number of available jobs remains high at well above 8 million. Analysts also expect the unemployment rate to stay steady at 3.9% for May, while non-farm payrolls are expected to dip slightly. The wildcard next week could be the latest Services PMI report. The services economy contracted in April, perhaps an early warning sign of weakness in the U.S. economy. Another dip in this metric could prompt the central bank to quickly change its tune on rates and begin lowering them by the end of the summer.
Given this economic backdrop, let us see how this impacts the performance of various investment strategies.
Investment Strategy Scorecard
Overall, major U.S. stock indices continued to post positive results for the rolling month.
Silver and semiconductor strategies posted positive returns for the rolling month. Meanwhile, some mid cap, oil and cannabis strategies struggled.
U.S Equity Strategies
Among U.S. equities, several growth strategies continued to post solid performances for the rolling month.
Winning
- HCM Tactical Growth Fund (HCMDX), up 9.39%
- Virtus AllianzGI Focused Growth Fund (PGWAX), up 7.62%
- Fidelity® Nasdaq Composite Index® ETF (ONEQ), up 6.65%
- iShares Core S&P U.S. Growth ETF (IUSG), up 6.25%
- iShares Core S&P U.S. Value ETF (IUSV), up 1.38%
- iShares Russell Mid-Cap Growth ETF (IWP), up 0.93%
Losing
- Voya Russell Small Cap Index Portfolio (IRSIX), down -3.59%
- Voya Russell Mid Cap Index Portfolio (IRMCX), down -8.42%
Dividend Strategies
Several dividend growth strategies continued to rally over the rolling month.
Winning
- Fidelity® Dividend Growth Fund (FDGFX), up 6.65%
- Fidelity Advisor® Dividend Growth Fund (FDGTX), up 6.56%
- Fidelity® Dividend ETF for Rising Rates (FDRR), up 5.22%
- Fidelity® High Dividend ETF (FDVV), up 4.94%
Losing
- Pioneer Equity Income Fund (PEQIX), down -0.36%
- Legg Mason Low Volatility High Dividend ETF (LVHD), down -0.95%
- ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL), down -1.1%
- DWS CROCI Equity Dividend Fd (KDHSX), down -1.11%
U.S. Fixed Income Strategies
In US fixed income, long duration debt strategies continued to post positive results for the rolling month.
Winning
- PIMCO StocksPLUS® Long Duration Fund (PSLDX), up 6.03%
- PIMCO Extended Duration Fund (PEDPX), up 2.92%
- Invesco CEF Income Composite ETF (PCEF), up 2.34%
- PIMCO 15+ Year U.S. TIPS Index Exchange-Traded Fund (LTPZ), up 2.14%
Losing
- Dupree Kentucky Tax Free Income Series Fund (KYTFX), down -0.98%
- AMG GW&K Municipal Bond Fund (GWMIX), down -1.15%
- ProShares Short 20+ Year Treasury (TBF), down -1.48%
- iShares Floating Rate Bond ETF (FLOT), down -2.33%
Foreign Equity Strategies
Among foreign equities, Taiwan and Sweden equity strategies posted solid performances, while Saudi Arabian stragies contnued to struggle.
Winning
- iShares MSCI Taiwan ETF (EWT), up 8.46%
- iShares MSCI Sweden ETF (EWD), up 7.58%
- Franklin International Growth Fund (FNGZX), up 7.37%
- Virtus KAR International Small-Cap Fund (VCISX), up 7.21%
- Harding Loevner Institutional Emerging Markets Portfolio (HLEZX), up 0.61%
- Virtus Vontobel Emerging Markets Opportunities Fund (VREMX), up 0.42%
Losing
Foreign Fixed Income Strategies
Majority of foreign fixed income strategies posted moderate gains for the rolling month.
Winning
- Invesco International Bond Fund (OIBIX), up 2.63%
- VanEck J.P. Morgan EM Local Currency Bond ETF (EMLC), up 2.19%
- Eaton Vance Emerging Markets Local Income Fund (EEIIX), up 1.81%
- iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB), up 1.69%
- iShares International Treasury Bond ETF (IGOV), up 1.31%
- SPDR® Bloomberg Barclays International Treasury Bond ETF (BWX), up 1.12%
- Janus Henderson Developed World Bond Fund (HFARX), up 0.54%
- DFA World ex U.S. Government Fixed Income Portfolio (DWFIX), flat 0%
Alternatives
Among alternatives, gold strategies continued to post strong results over the rolling month, while agriculture and managed futures strategies continued to struggle.
Winning
- Fidelity® Select Gold Portfolio (FSAGX), up 7.22%
- Fidelity® Contrafund® Fund (FCNKX), up 6.56%
- iShares Currency Hedged MSCI Eurozone ETF (HEZU), up 3.62%
- Aberdeen Standard Bloomberg All Commodity Strategy K-1 Free ETF (BCI), up 2.96%
Losing
- iShares S&P GSCI Commodity-Indexed Trust (GSG), down -0.85%
- AQR Managed Futures Strategy Fund (AQMIX), down -1.71%
- PIMCO TRENDS Managed Futures Strategy Fund (PQTIX), down -2.57%
- ETFMG Alternative Harvest ETF (MJ), down -23.6%
Sectors
Among the sectors and industries, solar energy, silver and semiconductor strategies posted strong performance, while cannabis, healthcare and energy strategies struggled.
Winning
- Invesco Solar ETF (TAN), up 21.5%
- iShares Silver Trust (SLV), up 18.17%
- Fidelity® Select Semiconductors Portfolio (FSELX), up 12.55%
- Fidelity Advisor® Semiconductors Fund (FIKGX), up 11.95%
Losing
- Fidelity® Select Health Care Services Portfolio (FSHCX), down -3.32%
- Goldman Sachs MLP Energy Infrastructure Fund (GLPSX), down -3.63%
- ProShares Short QQQ (PSQ), down -5.39%
- AdvisorShares Pure US Cannabis ETF (MSOS), down -29.84%
Methodology
Every week, MutualFunds.com provides a snapshot of the performance of some key mutual funds and ETFs to highlight the trending investment strategies across different sectors, geographic regions, asset classes and themes. MutualFunds.com uses a proprietary system to scan through thousands of relevant mutual funds and ETFs. Fund performance data is calculated for the trailing one month, based on the change in NAV.
Here is a summary of the different strategies covered in this article:
- U.S. equity strategies typically cover different equity investing styles (growth/value/blend) and market capitalizations (small/mid/large).
- Dividend strategies focus on generating income via different equity routes (high yield/dividend growth/foreign dividend/quality dividend)
- U.S. fixed income strategies focus on debt securities issued by U.S. entities and can cover different types of debt (corporate/municipal/high-yield/investment-grade/government/asset-backed) and maturity profiles (short/medium/long).
- Foreign equity strategies cover equity strategies applied to non-U.S. markets based on the level of economic growth (emerging/developed), regions (Asia/Europe/Africa), and market capitalizations (small/mid/large).
- Foreign fixed-income strategies focus on debt securities issued outside the U.S. markets and can cover different regions (Asia/Europe/Africa) and regions based on the level of economic development (emerging/developed).
- Alternative strategies cover non-traditional investments (currencies, hedge funds strategies, derivatives, volatility-based), real estate, and commodities.
- Sector strategies cover dedicated exposure to various sectors of the U.S. economy including technology, healthcare, financial, and industrial among others.