Stocks logged some of their worst returns of the year last week as tech and other growth shares declined.

All told the Dow Jones lost more than 500 points while the NASDAQ sank 2.8%. Investor attention has turned to earnings as many bellwethers across the economy have reported slowing growth. This includes Domino’s Pizza, which reported that it plans to open fewer stores than expected. June retail sales came in flat, with consumers clamping down on spending amid a weakening labor market. Housing data, however, was bullish on the week, with building permits and housing starts both showing signs of life and beating estimates. Speeches by Federal Reserve Chair Jerome Powell and other central bank governors provided little clarity on the pace of interest rate cuts. That said, Powell reiterated that the central bank would start focusing on its other mandate—employment—as the economy began to falter. A single-minded focus on inflation appears to be in the rearview mirror.

Next week, investors will get insight into a key piece of the Federal Reserve’s thinking with the release of the U.S. Core PCE price index. The central bank’s preferred measure of inflation increased by just 0.1% in May, the slowest increase since November of 2023. With another favorable reading, the Federal Reserve may have enough ammunition to cut rates in September. Stocks could swoon on a higher-than-expected inflation print, however. Meanwhile, the latest GDP figures are expected to show a 2% increase for the second quarter. Also on deck will be personal spending and income data, which has continued to show a strong consumer economy. Finally, existing home sales are expected to decline by 0.7%. Here again, declines could provide the central bank with ammunition to start cutting rates amid a softening economy.

Given this economic backdrop, let us see how this impacts the performance of various investment strategies.

Overall, for the rolling month, well-diversified equity indices were still up but the technology sector was down.

Real estate, regional banking, and gold strategies outperformed others over the rolling month. Meanwhile, growth-focused strategies, especially technology, were down.

U.S Equity Strategies

Among U.S. equities, several small-cap strategies posted solid performances for the rolling month, while large-cap strategies struggled.

Winning

• iShares Micro-Cap ETF (IWC), up 12.83%
• Goldman Sachs Small Cap Value Insights Fund (GSATX), up 12.67%
• iShares Russell 2000 Value ETF (IWN), up 12.6%
• Bridgeway Omni Small-Cap Value Fund (BOSVX), up 12.49%
• iShares Morningstar Growth ETF (ILCG), flat 0%

Losing

• Invesco Dynamic Large Cap Growth ETF (PWB), down -0.1%
• Voya U.S. Stock Index Portfolio (INGIX), down -5.65%
• Columbia Select Large Cap Growth Fund (CCWRX), down -9.28%

Dividend Strategies

Several dividend growth and sector-specific strategies continued to rally over the rolling month.

Winning

• ProShares Russell 2000 Dividend Growers ETF (SMDV), up 12.22%
• WisdomTree U.S. SmallCap Dividend Fund (DES), up 11.14%
• Federated Hermes Strategic Value Dividend Fund (SVAIX), up 7.09%
• Principal Small-MidCap Dividend Income Fund (PMDIX), up 6.64%
• Fidelity® Dividend ETF for Rising Rates (FDRR), up 2.41%
• WisdomTree U.S. Quality Dividend Growth Fund (DGRW), up 2%
• Fidelity Advisor® Dividend Growth Fund (FDGTX), up 0.09%
• Fidelity® Dividend Growth Fund (FDGFX), up 0.03%

U.S. Fixed Income Strategies

In US fixed income, convertible, and long-duration strategies performed better than others.

Winning

• iShares Convertible Bond ETF (ICVT), up 3.07%
• PIMCO StocksPLUS® Long Duration Fund (PSLDX), up 2.95%
• Columbia Income Builder Fund (RBBAX), up 2.56%
• Invesco CEF Income Composite ETF (PCEF), up 2.35%

Losing

• VanEck Investment Grade Floating Rate ETF (FLTR), down -0.12%
• Great-West Core Strategies: Flexible Bond Fund (MXEDX), down -0.81%
• ProShares Short 20+ Year Treasury (TBF), down -1.53%
• City National Rochdale Fixed Income Opportunities Fund (RIMOX), down -1.7%

Foreign Equity Strategies

Among foreign equities, Mexico and Latin American equity strategies rallied, while Chinese equity strategies struggled.

Winning

• iShares MSCI Mexico ETF (EWW), up 8.15%
• iShares Latin America 40 ETF (ILF), up 7.82%
• Matthews Japan Fund (MJFOX), up 7.34%
• Virtus KAR International Small-Cap Fund (VCISX), up 7.01%

Losing

• Matthews Asian Growth and Income Fund (MACSX), down -1.58%
• Artisan Developing World Fund (APHYX), down -1.62%
• SPDR® S&P China ETF (GXC), down -3.7%
• WisdomTree China ex-State-Owned Enterprises Fund (CXSE), down -4.61%

Foreign Fixed Income Strategies

The majority of the foreign market debt strategies were slightly up over the rolling month.

Winning

• Invesco International Bond Fund (OIBIX), up 3.33%
• PIMCO Emerging Markets Local Currency and Bond Fund (PELPX), up 3.01%
• VanEck J.P. Morgan EM Local Currency Bond ETF (EMLC), up 3%
• SPDR® Bloomberg Barclays Emerging Markets Local Bond ETF (EBND), up 2.57%
• iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB), up 1.08%
• Eaton Vance Emerging Markets Debt Opportunities Fund (EIDOX), up 0.64%
• VanEck Emerging Markets High Yield Bond ETF (HYEM), up 0.57%
• Janus Henderson Developed World Bond Fund (HFARX), up 0.52%

Alternatives

Among alternatives, gold strategies continued to be the top performer over the rolling month, while agriculture-focused strategies struggled.

Winning

• Fidelity® Select Gold Portfolio (FSAGX), up 14.04%
• Invesco S&P SmallCap Low Volatility ETF (XSLV), up 9.74%
• WisdomTree Japan Hedged Equity Fund (DXJ), up 6.08%
• Janus Henderson Contrarian Fund (JCNCX), up 5.71%

Losing

• Aberdeen Standard Bloomberg All Commodity Strategy K-1 Free ETF (BCI), down -2.29%
• DWS Enhanced Commodity Strategy Fund (SKSRX), down -3.06%
• AQR Managed Futures Strategy Fund (AQMIX), down -4.43%
• Invesco DB Agriculture Fund (DBA), down -5.31%

Sectors

Among the sectors and industries, real estate and regional banking strategies were the top performers, while semiconductor strategies were in the red.

Winning

• iShares Mortgage Real Estate Capped ETF (REM), up 50%
• SPDR® S&P Regional Banking ETF (KRE), up 20.98%
• John Hancock Regional Bank Fund (FRBAX), up 19.8%
• First Eagle Gold Fund (FEGIX), up 13.41%

Losing

• Fidelity® Select Semiconductors Portfolio (FSELX), down -5.46%
• Fidelity Advisor® Semiconductors Fund (FIKGX), down -5.86%
• Invesco Solar ETF (TAN), down -5.99%
• VanEck Vectors Semiconductor ETF (SMH), down -6.7%

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.