This week, the U.S. stock market saw tepid trading following recent highs, with selling pressure intensifying mid-week.
Despite declining short-term interest rates, long-term rates rose, underscoring ongoing inflation concerns. McDonald’s shares contributed to the Dow’s losses, mostly due to E. Coli issues affecting the stock. Economic data was sparse but significant; month-over-month durable goods orders fell unexpectedly by 0.8%, suggesting potential weaknesses in the economy. This development placed the Federal Reserve in a difficult position regarding future rate cuts and inflation management.
Looking ahead to next week, several key economic indicators are set for release, which will influence the Federal Reserve’s decision-making process. The Job Openings and Labor Turnover Survey (JOLTS) and GDP rates have been trending higher, indicating robust economic activity. This may limit the central bank’s ability to cut rates aggressively, as the latest FedWatch tool shows increased chances of a smaller rate cut. Additionally, the Federal Reserve’s preferred inflation gauge, the US Core PCE price index, is expected to be released, with analysts predicting a 0.4% increase—potentially reversing the trend of lower expected numbers.
Given this economic backdrop, let us see how this impacts the performance of various investment strategies.
Investment Strategy Scorecard
Overall, for the rolling month the broader markets remained marginally up.
Chinese equity strategies continued to remain in the positive territory over the rolling month, while some long-duration bond strategies continued to struggle.
U.S Equity Strategies
Among U.S. equities, several growth strategies continued to post decent gains for the rolling month.
Winning
- Lord Abbett Growth Leaders Fund (LGLIX), up 3.96%
- Fidelity Advisor® Growth Opportunities Fund (FAGAX), up 3.65%
- iShares Russell Mid-Cap Growth ETF (IWP), up 2.11%
- First Trust US Equity Opportunities ETF (FPX), up 1.8%
Losing
- SPDR® S&P 600 Small Cap Growth ETF (SLYG), down -2.19%
- iShares S&P Small-Cap 600 Growth ETF (IJT), down -2.33%
- Delaware Ivy Small Cap Growth Fund (IRGFX), down -3.2%
- Vanguard Developed Markets Index Fund (VDIPX), down -3.2%
Dividend Strategies
Dividend growth and high dividend strategies posted moderate gains, while international dividend strategies continued to be in the red for the rolling month.
Winning
- Pioneer Equity Income Fund (PEQIX), up 2.52%
- Fidelity® Dividend ETF for Rising Rates (FDRR), up 2.47%
- Lord Abbett Dividend Growth Fund (LAMYX), up 2.34%
- Fidelity® High Dividend ETF (FDVV), up 1.99%
Losing
- Matthews Asia Dividend Fund (MIPIX), down -1.71%
- Janus Henderson Global Equity Income Fund (HFQAX), down -1.72%
- iShares International Select Dividend ETF (IDV), down -3.58%
- SPDR® S&P International Dividend ETF (DWX), down -3.98%
U.S. Fixed Income Strategies
In US fixed income, convertible bond plays continued to post modest gains, while long-duration bond strategies continued to struggle.
Winning
- ProShares Short 20+ Year Treasury (TBF), up 6.21%
- iShares Convertible Bond ETF (ICVT), up 1.65%
- Calamos Market Neutral Income (CVSIX), up 0.66%
- Fidelity Advisor® Floating Rate High Income Fund (FIQSX), up 0.54%
Losing
- SPDR® Portfolio Long Term Treasury ETF (SPTL), down -6.19%
- iShares 20+ Year Treasury Bond ETF (TLT), down -6.69%
- Vanguard Extended Duration Treasury Index Fund (VEDIX), down -8.14%
- PIMCO Extended Duration Fund (PEDPX), down -8.93%
Foreign Equity Strategies
Among foreign equities, Chinese equity strategies continued to post solid gains.
Winning
- Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR), up 20.27%
- WisdomTree China ex-State-Owned Enterprises Fund (CXSE), up 19.33%
- Fidelity® China Region Fund (FHKCX), up 11.48%
- Fidelity® Emerging Asia Fund (FSEAX), up 9.23%
Losing
- iShares MSCI Japan ETF (EWJ), down -7.02%
- JPMorgan BetaBuilders Japan ETF (BBJP), down -7.06%
- Fidelity® Puritan® Fund (FPUKX), down -7.13%
- Matthews Japan Fund (MJFOX), down -7.45%
Foreign Fixed Income Strategies
Several emerging market and international treasury strategies struggled over the rolling one-month period.
Winning
- T. Rowe Price Dynamic Global Bond Fund (TRDZX), up 1.7%
Losing
- Eaton Vance Emerging Markets Debt Opportunities Fund (EIDOX), down -0.25%
- VanEck Emerging Markets High Yield Bond ETF (HYEM), down -0.86%
- iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB), down -2.57%
- iShares International Treasury Bond ETF (IGOV), down -4.33%
- SPDR® Bloomberg Barclays International Treasury Bond ETF (BWX), down -4.6%
- Eaton Vance Emerging Markets Local Income Fund (EEIIX), down -5.14%
- Templeton Global Bond Fund (TGBAX), down -6.59%
Alternatives
Among alternatives, gold posted the strongest gains over the rolling month, while some mortgage and managed futures strategies struggled.
Winning
- Fidelity® Select Gold Portfolio (FSAGX), up 7.63%
- ETFMG Alternative Harvest ETF (MJ), up 3.93%
- BlackRock Tactical Opportunities Fund (PCBAX), up 3.39%
- Invesco DB Commodity Index Tracking Fund (DBC), up 1.93%
Losing
- SPDR® DoubleLine Total Return Tactical ETF (TOTL), down -3.06%
- Janus Henderson Mortgage-Backed Securities ETF (JMBS), down -3.25%
- Columbia Mortgage Opportunities Fund (CLMAX), down -3.65%
- PIMCO TRENDS Managed Futures Strategy Fund (PQTIX), down -4.31%
Sectors
Among the sectors and industries, Chinese tech and consumer discretionary strategies were the top performers.
Winning
- Invesco China Technology ETF (CQQQ), up 25.31%
- Global X MSCI China Consumer Discretionary ETF (CHIQ), up 20.6%
- Franklin Gold and Precious Metals Fund (FGPMX), up 9.13%
- Sprott Gold Equity Fund (SGDLX), up 8.72%
Losing
- Fidelity® Select Health Care Services Portfolio (FSHCX), down -6.88%
- First Trust NASDAQ® Clean Edge® Green Energy Index Fund (QCLN), down -7.74%
- Invesco Solar ETF (TAN), down -9.53%
- iShares Developed Real Estate Index Fund (BARDX), down -19.28%
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.