Stocks wobbled at the start of last week as investors worried about recession fears and high valuations.

Adding to the worries was September’s reputation as a rocky month for equities. However, as the week wore on stocks gained momentum on the upside, driven by hopes for rate cuts from the Federal Reserve. Aiding these hopes was a soft Consumer Price Index. The CPI fell for the fifth consecutive month to 2.5% in August. This was the lowest since February 2021, down from July’s 2.9% and below forecasts of 2.6%. This increased the odds of a rate cut at next week’s Fed meeting to nearly 100%. Meanwhile, consumers remain bullish on lower inflationary pressures and the potential for lowered borrowing costs, with the University of Michigan’s consumer sentiment report jumping to 69, up from 64.

Next week, it’s all about the Federal Reserve. The central bank will be making its latest interest rate decision on Wednesday. Analysts expected the central bank to cut rates, with FedWatch tools now pegging the odds for a cut at 95%. The question will be, how much of a rate reduction? Stocks could rally if the Fed cuts by 0.50%. Meanwhile, other data next week could start the clock on the Federal Reserve’s next rate reduction. This includes retail sales, which are expected to increase as inflation continues to ease. Building permits and housing starts are also expected to show increases, rising from 1.4 million and 1.26 million, respectively. Mortgage rates have already begun to decline in anticipation of the Fed’s upcoming moves. The Federal Reserve’s press conference should provide clarity as to whether the first rate cut is one of many to come or whether it will be one and done for the time being.

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

Overall, for the rolling month, the broader market continued to post marginal gains.

Singaporean equity, financial, and real estate strategies posted some of the best performances over the rolling month. Meanwhile, oil strategies struggled.

U.S Equity Strategies

Among U.S. equities, several growth strategies continued to stay ahead of value strategies for the rolling month.

Winning

• Baron Growth Fund (BGRUX), up 4.46%
• Lazard US Equity Concentrated Portfolio (LEVOX), up 4.41%
• iShares Core S&P U.S. Value ETF (IUSV), up 3.17%
• Schwab U.S. Large-Cap Value ETF™ (SCHV), up 3.16%

Losing

• SPDR® S&P 600 Small Cap Growth ETF (SLYG), down -1.5%
• iShares S&P Small-Cap 600 Growth ETF (IJT), down -1.6%
• Hartford Disciplined Equity HLS Fund (HIAGX), down -2.2%
• Neuberger Berman Intrinsic Value Fund (NINLX), down -2.33%

Dividend Strategies

Several dividend strategies continued to post gains over the rolling month.

Winning

• SPDR® S&P International Dividend ETF (DWX), up 5.15%
• Legg Mason Low Volatility High Dividend ETF (LVHD), up 5.13%
• Vanguard Dividend Growth Fund (VDIGX), up 4.93%
• Federated Hermes Strategic Value Dividend Fund (SVAIX), up 4.36%
• WisdomTree U.S. MidCap Dividend Fund (DON), up 0.75%
• WisdomTree U.S. SmallCap Dividend Fund (DES), up 0.65%
• Fidelity Advisor® Dividend Growth Fund (FDGTX), up 0.28%

Losing

• Hartford Dividend and Growth HLS Fund (HIADX), down -3.55%

U.S. Fixed Income Strategies

In US fixed income, long duration strategies continued to rally.

Winning

• PIMCO Extended Duration Fund (PEDPX), up 5.43%
• Vanguard Extended Duration Treasury Index Fund (VEDIX), up 5.23%
• iShares 20+ Year Treasury Bond ETF (TLT), up 3.51%
• SPDR® Portfolio Long Term Treasury ETF (SPTL), up 3.13%

Losing

• DFA One Year Fixed Income Portfolio (DFIHX), down -0.1%
• WisdomTree Floating Rate Treasury Fund (USFR), down -0.1%
• T. Rowe Price Dynamic Global Bond Fund (TRDZX), down -0.91%
• ProShares Short 20+ Year Treasury (TBF), down -3.3%

Foreign Equity Strategies

Among foreign equities, Singaporean equity strategies posted solid gains, while Mexican and Chinese strategies continued to struggle.

Winning

• iShares MSCI Singapore ETF (EWS), up 8.68%
• SPDR® Dow Jones International Real Estate ETF (RWX), up 6.31%
• Brown Capital Management International Small Company Fund (BCSVX), up 4.34%
• Harding Loevner Institutional Emerging Markets Portfolio (HLEZX), up 4.28%

Losing

• Fidelity® China Region Fund (FHKCX), down -4.39%
• SPDR® S&P China ETF (GXC), down -4.47%
• Delaware Emerging Markets Fund (DEMRX), down -4.5%
• iShares MSCI Mexico ETF (EWW), down -8.62%

Foreign Fixed Income Strategies

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

Winning

• SPDR® Bloomberg Barclays International Treasury Bond ETF (BWX), up 1.45%
• JPMorgan Emerging Markets Debt Fund (JEDAX), up 1.44%
• TCW Emerging Markets Income Fund (TGEIX), up 1.37%
• iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB), up 1.37%
• SPDR® Bloomberg Barclays Emerging Markets Local Bond ETF (EBND), up 0.19%
• VanEck J.P. Morgan EM Local Currency Bond ETF (EMLC), up 0.04%
• PIMCO Emerging Markets Local Currency and Bond Fund (PELPX), flat 0%
• Eaton Vance Emerging Markets Local Income Fund (EEIIX), flat 0%

Alternatives

Among alternatives, long/short and low volatility strategies posted gains over the rolling month, while commodity strategies struggled.

Winning

• PIMCO RAE Worldwide Long/Short PLUS Fund (PWLBX), up 4.52%
• SPDR® SSGA US Large Cap Low Volatility Index ETF (LGLV), up 4.17%
• Fidelity® SAI U.S. Low Volatility Index Fund (FSUVX), up 3.84%
• Invesco Preferred ETF (PGX), up 3.74%

Losing

• ALPS/CoreCommodity Management CompleteCommoditiesSM Strategy Fund (JCRAX), down -2.95%
• PIMCO CommoditiesPLUS® Strategy Fund (PCLAX), down -5.32%
• iShares GSCI Commodity Dynamic Roll Strategy ETF (COMT), down -6.64%
• iShares S&P GSCI Commodity-Indexed Trust (GSG), down -6.77%

Sectors

Among the sectors and industries, financial and real estate strategies were the top performers while oil struggled.

Winning

• ProShares Ultra Financials (UYG), up 8.55%
• iShares Residential and Multisector Real Estate ETF (REZ), up 7.97%
• Neuberger Berman Real Estate Fund (NBRIX), up 7.34%
• American Century Real Estate Fund (REAIX), up 7.13%

Losing

• Fidelity Advisor® Semiconductors Fund (FIKGX), down -6.1%
• Fidelity® Select Energy Portfolio (FSENX), down -7.01%
• Invesco DB Oil Fund (DBO), down -12.68%
• United States Oil Fund, LP (USO), down -13.76%

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.