This week’s shortened trading session, coinciding with Christmas, saw modest gains after a potential government shutdown was avoided.
Those gains were tempered by bond yields rising to a six-month high. Economic data releases were limited, with initial jobless claims coming in at 219,000, below market expectations and barely changed from the previous reading. In addition, durable goods orders declined by 1.1% for November.
Next week, the New Year’s holiday will once again reduce trading days, leading to lower trading activity. Key data will include the ISM Manufacturing PMI and updates on producer inflation, with mortgage and energy figures also anticipated. These releases are not expected to significantly shift market momentum during a light-volume week.
Given this economic backdrop, let us see how this impacts the performance of various investment strategies.
Investment Strategy Scorecard
The broader markets were down for the rolling month.
Tech strategies continued to be the top performers for the rolling month, while low volatility and healthcare strategies struggled.
U.S Equity Strategies
Among U.S. equities, several growth strategies continued to post decent gains for the rolling month.
Winning
- Voya Russell Large Cap Growth Index Portfolio (IRLAX), up 6.6%
- Vanguard Mega Cap Growth Index Fund (VMGAX), up 6.05%
- Schwab U.S. Large-Cap Growth ETF™ (SCHG), up 5.01%
- Fidelity® Nasdaq Composite Index® ETF (ONEQ), up 4.85%
Losing
- iShares Russell 2000 Value ETF (IWN), down -8.07%
- SPDR® S&P 600 Small Cap Growth ETF (SLYG), down -8.14%
- Lazard US Equity Concentrated Portfolio (LEVOX), down -58.33%
- AB Growth Fund (AGRCX), down -67.81%
Dividend Strategies
The majority of the dividend strategies were in the red over the rolling month.
Losing
- Thornburg Investment Income Builder Fund (TIBAX), down -0.19%
- Principal Global Diversified Income Fund (PGBAX), down -0.5%
- FlexShares Quality Dividend Index Fund (QDF), down -1.73%
- O’Shares U.S. Quality Dividend ETF (OUSA), down -1.85%
- ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL), down -8.27%
- ProShares Russell 2000 Dividend Growers ETF (SMDV), down -9.54%
- Sterling Capital Equity Income Fund (BEGIX), down -24.71%
- Pioneer Equity Income Fund (PEQIX), down -30.79%
U.S. Fixed Income Strategies
Several long-duration bond strategies struggled over the rolling month.
Winning
- ProShares Short 20+ Year Treasury (TBF), up 4.13%
- ProShares Investment Grade—Interest Rate Hedged (IGHG), up 0.3%
- JPMorgan Strategic Income Opportunities Fund (JSOSX), up 0.26%
- Diamond Hill Short Duration Securitized Bond Fund (DHEIX), up 0.2%
Losing
- SPDR® Portfolio Long Term Treasury ETF (SPTL), down -4.72%
- iShares 20+ Year Treasury Bond ETF (TLT), down -5.29%
- PIMCO Extended Duration Fund (PEDPX), down -6.83%
- Mercer Opportunistic Fixed Income Fund (MOFIX), down -7.45%
Foreign Equity Strategies
Among foreign equities, Chinese equity strategies posted decent gains while Brazilian equity strategies continued to struggle.
Winning
- iShares MSCI China ETF (MCHI), up 3.13%
- SPDR® S&P China ETF (GXC), up 2.73%
- Principal Origin Emerging Markets Fund (POEFX), up 1.95%
- PGIM Jennison Emerging Markets Equity Opportunities Fund (PDEZX), up 1.77%
Losing
- iShares Latin America 40 ETF (ILF), down -12.69%
- iShares MSCI Brazil ETF (EWZ), down -17.14%
- American Beacon International Equity Fund (AAISX), down -20.86%
- Morgan Stanley Institutional Fund, Inc. International Equity Portfolio (MSIQX), down -27.71%
Foreign Fixed Income Strategies
Several global and emerging market debt strategies continued to post losses for the rolling month.
Winning
- T. Rowe Price Dynamic Global Bond Fund (TRDZX), up 0.39%
- Eaton Vance Emerging Markets Debt Opportunities Fund (EIDOX), up 0.38%
Losing
- VanEck Emerging Markets High Yield Bond ETF (HYEM), down -0.2%
- SPDR® Bloomberg Barclays International Treasury Bond ETF (BWX), down -1.42%
- SPDR® Bloomberg Barclays Emerging Markets Local Bond ETF (EBND), down -2.29%
- American Funds Emerging Markets Bond Fund (EBNFX), down -2.45%
- iShares International Treasury Bond ETF (IGOV), down -2.55%
- Templeton Global Bond Fund (TGBAX), down -4.57%
Alternatives
Among alternatives, managed futures strategies posted nominal gains over the rolling month, while some low volatility and contrarian strategies continued to struggle.
Winning
- PIMCO TRENDS Managed Futures Strategy Fund (PQTIX), up 2.06%
- iShares Currency Hedged MSCI Eurozone ETF (HEZU), up 1.44%
- Franklin K2 Alternative Strategies Fund (FABZX), up 1.15%
- iShares Currency Hedged MSCI Japan ETF (HEWJ), up 1.06%
Losing
- VanEck Vectors Agribusiness ETF (MOO), down -10.12%
- ETFMG Alternative Harvest ETF (MJ), down -12.64%
- Janus Henderson Contrarian Fund (JCNCX), down -14.75%
- Mercer Global Low Volatility Equity Fund (MGLVX), down -42.06%
Sectors
Among the sectors and industries, tech strategies continued to be the top performers while healthcare strategies struggled.
Winning
- ARK Autonomous Technology & Robotics ETF (ARKQ), up 10.83%
- American Beacon ARK Transformational Innovation Fund (ADNYX), up 7.01%
- ARK Next Generation Internet ETF (ARKW), up 6.22%
- Fidelity® Series Blue Chip Growth Fund (FSBDX), up 5.82%
Losing
- Fidelity Advisor® Health Care Fund (FHCCX), down -18.17%
- AdvisorShares Pure US Cannabis ETF (MSOS), down -19.43%
- Fidelity® Select Health Care Services Portfolio (FSHCX), down -20.46%
- Invesco S&P 500® Equal Weight Consumer Discretionary ETF (RCD), down -55%
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.