Stocks spent much of the week climbing as investors cheered good earnings and economic data.
Retail giant Walmart reported strong earnings, driven by digital gains and rising sales. Those sales were reflected in a higher-than-expected nationwide retail sales gain of 1%. Also helping spur the markets higher was the revelation that Warren Buffet and Berkshire Hathway had taken a stake in cosmetics retailer Ulta Beauty. Lower inflation figures – down to 2.9% and below forecasts -also helped move the markets. Building permits and housing starts dropped below forecasts and clocked in at the lowest points in this rate cycle. Several regional manufacturing indexes, such as the NY Empire State and Philly Fed, showed contraction figures. With all the above economic data, FedWatch tools predicting a cut are now at the highest probability they have been, which has led investors to bid up stocks.
Overall data will be light heading into mid-week, when investors will once again focus on the central bank and gain insight to its decision-making process with the latest Federal Open Market Committee (FOMC) meeting minutes. At its last meeting, the FOMC kept rates at 23-year highs of 5.5%, in-line with expectations. The latest FedWatch tools predict a 90%+ chance of a rate cut in September. Policy makers have continued to voice the opinion that there has been further progress towards the 2% target as well as deterioration in the economy. The meeting minutes, along with a speech by Chairman Powell at the end of the week, will provide plenty of information on if and when the rate cuts will finally come to fruition. Aside from the Fed’s policy information, the Energy Information Administration (EIA) and Mortgage Bankers Association (MBA) will release a slew of critical mortgage and energy information.
Given this economic backdrop, let us see how this impacts the performance of various investment strategies.
Investment Strategy Scorecard
Overall, for the rolling month major market indexes continued to be in the red.
Utilities trategies outperformed others over the rolling month. Meanwhile, semiconductors continue to be in the red.
U.S Equity Strategies
Among U.S. equities, mid cap value strategies posted gains for the rolling month, while several growth strategies struggled.
Winning
- Independent Franchise Part Equity Fund (IFPUX), up 2.28%
- Nuance Mid Cap Value Fund (NMAVX), up 1.66%
Losing
- iShares Core S&P U.S. Value ETF (IUSV), down -1.11%
- Schwab U.S. Large-Cap Value ETF™ (SCHV), down -1.66%
- iShares Russell 2000 Growth ETF (IWO), down -8.69%
- iShares Micro-Cap ETF (IWC), down -11.29%
- VY® T. Rowe Price Growth Equity Portfolio (ITRGX), down -16.93%
- VY® T. Rowe Price Diversified Mid Cap Growth Portfolio (IAXTX), down -17.14%
Dividend Strategies
Some high and strategically focused dividend strategies performed better than others.
Winning
- Invesco S&P 500® High Dividend Low Volatility ETF (SPHD), up 3.73%
- SPDR® S&P International Dividend ETF (DWX), up 3.23%
- Federated Hermes Strategic Value Dividend Fund (SVAIX), up 2.75%
- DWS CROCI Equity Dividend Fd (KDHSX), up 2.04%
Losing
- First Trust Rising Dividend Achievers ETF (RDVY), down -4.51%
- WisdomTree U.S. SmallCap Dividend Fund (DES), down -5.11%
- BlackRock Equity Dividend Fund (MKDVX), down -5.39%
- HCM Dividend Sector Plus Fund (HCMNX), down -10.31%
U.S. Fixed Income Strategies
In US fixed income, long duration strategies continued to rally.
Winning
- Vanguard Extended Duration Treasury Index Fund (VEDIX), up 5.6%
- PIMCO Extended Duration Fund (PEDPX), up 5.38%
- iShares 20+ Year Treasury Bond ETF (TLT), up 3.95%
- SPDR® Portfolio Long Term Treasury ETF (SPTL), up 3.84%
Losing
- Fidelity® Capital & Income Fund (FAGIX), down -1.59%
- Fidelity Advisor® High Income Advantage Fund (FAHYX), down -1.61%
- iShares Convertible Bond ETF (ICVT), down -2.51%
- ProShares Short 20+ Year Treasury (TBF), down -3.76%
Foreign Equity Strategies
Among foreign equities, Brazilian equity strategies posted gains, while emerging market strategies continued to struggle.
Winning
- iShares MSCI Brazil ETF (EWZ), up 2.77%
- SPDR® Dow Jones International Real Estate ETF (RWX), up 2%
- Vanguard Emerging Markets Government Bond Index Fund (VGAVX), up 1.12%
- Oakmark International Fund (OANEX), up 0.96%
Losing
- Principal Origin Emerging Markets Fund (POEFX), down -6.57%
- iShares Asia 50 ETF (AIA), down -6.94%
- iShares MSCI Mexico ETF (EWW), down -7.54%
- Delaware Emerging Markets Fund (DEMRX), down -8.78%
Foreign Fixed Income Strategies
Majority of the foreign market debt strategies were slightly up over the rolling month.
Winning
- SPDR® Bloomberg Barclays International Treasury Bond ETF (BWX), up 3.97%
- Templeton Global Bond Fund (TGBAX), up 3.71%
- iShares International Treasury Bond ETF (IGOV), up 3.12%
- T. Rowe Price International Bond Fund (PAIBX), up 3.04%
- iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB), up 1%
- VanEck Emerging Markets High Yield Bond ETF (HYEM), up 0.83%
- Fidelity Advisor® New Markets Income Fund (FNMIX), up 0.47%
Losing
- Eaton Vance Emerging Markets Debt Opportunities Fund (EIDOX), down -0.51%
Alternatives
Among alternatives, mortgage strategies were some of the top performers over the rolling month, while hedged Japanese equity strategies continued to struggle.
Winning
- Columbia Mortgage Opportunities Fund (CLMAX), up 2.85%
- SPDR® DoubleLine Total Return Tactical ETF (TOTL), up 2.19%
- SPDR® SSGA US Large Cap Low Volatility Index ETF (LGLV), up 2.17%
- Fidelity Advisor® Mortgage Securities Fund (FIKUX), up 2.04%
Losing
- American Beacon AHL Managed Futures Strategy Fund (AHLYX), down -6.62%
- AlphaSimplex Managed Futures Strategy Fund (AMFAX), down -10.22%
- iShares Currency Hedged MSCI Japan ETF (HEWJ), down -12.2%
- WisdomTree Japan Hedged Equity Fund (DXJ), down -12.65%
Sectors
Among the sectors and industries, utilities were the top performer while semiconductors continue to be in the backseat.
Winning
- ProShares Short QQQ (PSQ), up 7.24%
- Franklin Utilities Fund (FKUTX), up 5.84%
- Utilities Select Sector SPDR® Fund (XLU), up 5.78%
- Vanguard Utilities Index Fund (VUIAX), up 5.3%
Losing
- Fidelity® Select Semiconductors Portfolio (FSELX), down -13.15%
- American Beacon ARK Transformational Innovation Fund (ADNYX), down -14.85%
- SPDR® S&P Semiconductor ETF (XSD), down -19.53%
- Invesco WilderHill Clean Energy ETF (PBW), down -24.05%
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.