Last week, stocks whipsawed after the Federal Reserve’s decision to cut rates by 0.50%, the first cut since before the COVID-19 pandemic.

Initially, investors cheered the action. However, by the tail end of the week, stocks drifted lower due to profit-taking moves and worries about the central bank’s future rate cut plans. In his press conference, Federal Reserve Chairman Jerome Powell suggested there would be at least another 0.50% worth of cuts by year-end. Yet strong inflation may put a dent in those plans. Meanwhile, retail sales recorded a 0.1% gain, surprising analysts who were expecting a decline after last month’s huge surge. Lower-than-expected initial jobless claims kept selling pressure on stocks and helped dent investor enthusiasm for future rate cuts.

Next week, the Federal Reserve will still be on tap with several key speeches from several governors, as well as Chairman Powell. Investors will be keen to see just what the central bank is thinking after a few governors looked for a 0.25% rate cut at the latest meeting. In addition, GDP figures, which are expected to show a robust economy at a 3% annual rate, may also dent future rate-cut hopes. The latest FedWatch tools are mixed about the magnitude of future Fed easing. The core PCE price index, the Federal Reserve’s preferred gauge to measure underlying inflation, is expected to show a 0.2% rise. This indicates that inflation, while tamed, is still running strong. Any higher number may mean the central bank will have to pause its path of rate cuts for the time being, potentially sending stocks lower for the week.

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 be volatile.

Mortgage and real estate strategies posted some of the best performances over the rolling month. Meanwhile, growth 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

• Spyglass Growth Fund (SPYGX), up 8.7%
• First Trust US Equity Opportunities ETF (FPX), up 5.69%
• Morgan Stanley Institutional Fund, Inc. Growth Portfolio (MSEGX), up 4.75%
• iShares Russell 2000 Value ETF (IWN), up 3.72%

Losing

• Schwab U.S. Large-Cap Growth ETF™ (SCHG), down -1.04%
• Fidelity® Nasdaq Composite Index® ETF (ONEQ), down -1.14%
• Hartford Disciplined Equity HLS Fund (HIAGX), down -3.11%
• Fidelity® Series Small Cap Opportunities Fund (FSOPX), down -4.72%

Dividend Strategies

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

Winning

• Invesco S&P 500® High Dividend Low Volatility ETF (SPHD), up 3.83%
• Legg Mason Low Volatility High Dividend ETF (LVHD), up 3.8%
• Federated Hermes Strategic Value Dividend Fund (SVAIX), up 3.64%
• Principal Small-MidCap Dividend Income Fund (PMDIX), up 3.5%
• WisdomTree U.S. Quality Dividend Growth Fund (DGRW), up 0.89%
• Fidelity® Dividend ETF for Rising Rates (FDRR), up 0.44%

Losing

• Hartford Dividend and Growth HLS Fund (HIADX), down -4.27%
• Fidelity® Dividend Growth Fund (FDGFX), down -5.24%

U.S. Fixed Income Strategies

In US fixed income, long-duration strategies showed signs of struggle while strategic and convertible bond strategies posted modest gains.

Winning

• Invesco CEF Income Composite ETF (PCEF), up 2.42%
• Loomis Sayles Strategic Income Fund (NEZAX), up 2.23%
• Loomis Sayles Bond Fund (LSBNX), up 2.03%
• iShares Convertible Bond ETF (ICVT), up 1.87%

Losing

• WisdomTree Floating Rate Treasury Fund (USFR), down -0.14%
• ProShares Short 20+ Year Treasury (TBF), down -0.63%
• Nuveen Short Duration High Yield Municipal Bond Fund (NVHAX), down -1.01%
• PIMCO StocksPLUS® Long Duration Fund (PSLDX), down -2.82%

Foreign Equity Strategies

Among foreign equities, Singaporean equity strategies continued to post solid gains, while emerging market strategies struggled.

Winning

• iShares MSCI Singapore ETF (EWS), up 7.54%
• SPDR® Dow Jones International Real Estate ETF (RWX), up 4.96%
• Virtus KAR International Small-Cap Fund (VCISX), up 3.15%
• Longleaf Partners International Fund (LLINX), up 3.03%

Losing

• Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR), down -3.96%
• Fidelity Advisor Emerging Markets Fund (FEQMX), down -4.18%
• iShares MSCI South Korea ETF (EWY), down -4.61%
• Delaware Emerging Markets Fund (DEMRX), down -5.63%

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 1.91%
• Invesco International Bond Fund (OIBIX), up 1.81%
• John Hancock Funds Emerging Markets Debt Fund (JEMIX), up 1.66%
• iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB), up 1.41%
• SPDR® Bloomberg Barclays Emerging Markets Local Bond ETF (EBND), up 0.67%
• VanEck Emerging Markets High Yield Bond ETF (HYEM), up 0.56%
• Fidelity Advisor® New Markets Income Fund (FNMIX), up 0.46%
• Eaton Vance Emerging Markets Debt Opportunities Fund (EIDOX), up 0.25%

Alternatives

Among alternatives, preferred stock strategies posted gains over the rolling month, while commodity strategies continued to struggle.

Winning

• Virtus InfraCap U.S. Preferred Stock ETF (PFFA), up 5.08%
• Invesco DB Agriculture Fund (DBA), up 4.82%
• Janus Henderson Contrarian Fund (JCNCX), up 4.77%
• Franklin Convertible Securities Fund (FCSZX), up 2.95%

Losing

• PIMCO CommoditiesPLUS® Strategy Fund (PCLAX), down -2.21%
• WisdomTree Japan Hedged Equity Fund (DXJ), down -2.84%
• ETFMG Alternative Harvest ETF (MJ), down -2.92%
• Fidelity® Series Commodity Strategy Fund (FCSSX), down -8.82%

Sectors

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

Winning

• iShares Mortgage Real Estate Capped ETF (REM), up 50%
• Aberdeen Standard Physical Palladium Shares ETF (PALL), up 13.81%
• Baron Real Estate Fund (BREFX), up 7.11%
• Neuberger Berman Real Estate Fund (NBRIX), up 6.92%

Losing

• KraneShares Global Carbon ETF (KRBN), down -6.97%
• Invesco Dynamic Semiconductors ETF (PSI), down -7.23%
• MassMutual Blue Chip Growth Fund (MBCZX), down -11.33%
• MassMutual Select Blue Chip Growth Fund (MBGFX), down -13.44%

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.