This week’s economic data releases indicated stable conditions in key areas of the U.S. economy.
Major equity indexes rose as job openings reached 7.7 million and quits climbed to 3.3 million in October, suggesting a confident labor force. The ADP report reinforced the view of a balanced employment situation. Additionally, both services and manufacturing PMI reports registered increases, and Federal Reserve commentary highlighted signs of moderating price pressures.
In the coming week, attention will center on new inflation figures, specifically the Consumer Price Index (CPI) release. Analysts forecast the annual inflation rate rising from 2.6% in October to around 2.7% in November, potentially affecting current expectations for additional interest rate cuts and suggesting that a higher neutral rate could become the norm. While the FedWatch tool currently indicates this possibility, there are indications that a rate hike scenario could also emerge. The final batch of S&P 500 companies to report earnings will also draw focus.
Given this economic backdrop, let us see how this impacts the performance of various investment strategies.
Investment Strategy Scorecard
The broader markets continued to post solid gains for the rolling month.
Growth, especially tech, strategies continued to be the top performers for the rolling month, while Brazilian and South Korean equity strategies struggled.
U.S Equity Strategies
Among U.S. equities, several growth strategies continued to post impressive gains for the rolling month.
Winning
- Morgan Stanley Institutional Fund, Inc. Growth Portfolio (MSEGX), up 29.5%
- Spyglass Growth Fund (SPYGX), up 26.97%
- First Trust US Equity Opportunities ETF (FPX), up 18.32%
- iShares Russell Mid-Cap Growth ETF (IWP), up 15.27%
- iShares Core S&P U.S. Value ETF (IUSV), up 4.63%
- Schwab U.S. Large-Cap Value ETF™ (SCHV), up 4.61%
Losing
- Tweedy, Browne Global Value Fund (TBGVX), down -0.14%
- Lord Abbett Fundamental Equity Fund (LAVVX), down -0.98%
Dividend Strategies
Small-cap dividend strategies continued to post solid gains for the rolling month.
Winning
- HCM Dividend Sector Plus Fund (HCMNX), up 10.61%
- WisdomTree U.S. SmallCap Dividend Fund (DES), up 9.51%
- ProShares Russell 2000 Dividend Growers ETF (SMDV), up 8.79%
- Vanguard Diversified Equity Fund (VDEQX), up 7.7%
- SPDR® S&P International Dividend ETF (DWX), up 0.11%
Losing
- iShares International Select Dividend ETF (IDV), down -1.35%
- Ivy Mid Cap Income Opportunities Fund (IVOSX), down -4.27%
- Pioneer Equity Income Fund (PEQIX), down -23.22%
U.S. Fixed Income Strategies
In US fixed income, long-duration bond strategies continued to post strong results, while floating rate and inflation-focused bond strategies struggled.
Winning
- PIMCO StocksPLUS® Long Duration Fund (PSLDX), up 9.12%
- PIMCO Extended Duration Fund (PEDPX), up 3.44%
- Invesco CEF Income Composite ETF (PCEF), up 3.12%
- SPDR® Portfolio Long Term Corporate Bond ETF (SPLB), up 2.35%
Losing
- ProShares Short 20+ Year Treasury (TBF), down -1.83%
- T. Rowe Price Limited Duration Inflation Focused Bond Fund (TRBFX), down -2.5%
- iShares Floating Rate Bond ETF (FLOT), down -2.52%
- T. Rowe Price U.S. Limited Duration TIPS Index Fund (TLDTX), down -2.68%
Foreign Equity Strategies
Among foreign equities, Singaporean and Japanese equity strategies posted solid gains while Brazilian and South Korean equity strategies struggled.
Winning
- Lord Abbett Developing Growth Fund (LADVX), up 10.67%
- iShares MSCI Singapore ETF (EWS), up 7.31%
- Matthews Japan Fund (MJFOX), up 6.52%
- Xtrackers MSCI Kokusai Equity ETF (KOKU), up 5.53%
Losing
- Morgan Stanley Pathway Funds International Equity Fund (TIEUX), down -6.1%
- Thornburg International Growth Fund (THGIX), down -6.36%
- iShares MSCI South Korea ETF (EWY), down -7.7%
- iShares MSCI Brazil ETF (EWZ), down -8.45%
Foreign Fixed Income Strategies
Several emerging market debt strategies continued to struggle over the rolling one-month period.
Winning
- Janus Henderson Developed World Bond Fund (HFARX), up 2.47%
- DFA World ex U.S. Government Fixed Income Portfolio (DWFIX), up 2%
- iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB), up 1.65%
- VanEck Emerging Markets High Yield Bond ETF (HYEM), up 1.13%
Losing
- SPDR® Bloomberg Barclays Emerging Markets Local Bond ETF (EBND), down -0.79%
- PIMCO Emerging Markets Local Currency and Bond Fund (PELPX), down -1.04%
- VanEck J.P. Morgan EM Local Currency Bond ETF (EMLC), down -1.46%
- Eaton Vance Emerging Markets Local Income Fund (EEIIX), down -1.83%
Alternatives
Among alternatives, convertible security strategies continued to post solid gains over the rolling month, while cannabis and gold struggled.
Winning
- Virtus AllianzGI Convertible Fund (ANZAX), up 9.14%
- Lord Abbett Convertible Fund (LCFVX), up 8.71%
- Invesco S&P SmallCap Low Volatility ETF (XSLV), up 7.85%
- iShares Convertible Bond ETF (ICVT), up 6.44%
Losing
- Invesco Balanced-Risk Commodity Strategy Fund (BRCCX), down -1.65%
- Invesco DB Commodity Index Tracking Fund (DBC), down -2.73%
- Fidelity® Select Gold Portfolio (FSAGX), down -4.16%
- ETFMG Alternative Harvest ETF (MJ), down -25.3%
Sectors
Among the sectors and industries, tech strategies continued to be the top performers while cannabis and healthcare struggled.
Winning
- ARK Next Generation Internet ETF (ARKW), up 32.72%
- ARK Fintech Innovation ETF (ARKF), up 31.68%
- American Beacon ARK Transformational Innovation Fund (ADNYX), up 30.02%
- Fidelity® Select Software & IT Services Portfolio (FSCSX), up 15.05%
Losing
- Delaware Ivy Science and Technology Fund (WSTAX), down -8.78%
- Invesco Solar ETF (TAN), down -12.32%
- Delaware Healthcare Fund (DLHAX), down -12.44%
- AdvisorShares Pure US Cannabis ETF (MSOS), down -42.48%
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.