Mutual Fund, ETF, and Financial Markets Update October 2014

Stocks were down (2.1%) in September to end the 3rd Quarter of 2014 flat. Size mattered this time around with Large Cap Stocks up 1.1% while small cap stocks lost (7.4%). A strong dollar and a weak economy in Europe did not help international stocks either as they fell (5.3%). There was no place to hide this month as bonds were down (0.7%) to finish the quarter up only 0.2%.

Investment Returns as of September 2014

Investment Returns as of September 2014

Our patience with Managed Futures looks like it is finally starting to pay off as it appears this category bottomed out back in August. Aspen Managed Futures Strategy (MFBPX) was our top fund the third quarter with a gain of 7.4%. Next in line was PIMCO Foreign Bond (USD-Hedged) (PFODX) which gained 2.5%. This fund performed well because it is hedged against the dollar so it does not fall when the dollar rises. While bond funds did not do much this quarter, most actively managed funds lost a little ground. Two that bucked the trend were Metropolitan West Total Return Bond (MWTRX) and Metropolitan West Unconstrained Bond (MWCRX) which both ticked up 0.3%.

Fidelity Contrafund (FCNTX) was one of only a few equity funds to turn in positive results with a gain of 1.8% while Wasatch Frontier Emerging Small Countries (WAFMX) added 0.9%. This least of the losers in the equity category were American Century Mid Cap Value (ACMVX) with a loss of (0.9%), Matthews Asia Dividend (MAPIX) which fell (2.1%) and Hodges Small Cap (HDPSX) which lost (4.7%).

As signs of a weak global economy circulated in the news, gains from a strong US dollar were captured by the PowerShares DB US Dollar Index Bullish (UUP) which picked up 7.6% this quarter. This bad news for commodities, in particular precious metals and energy, was reflected in PowerShares DB Commodity Index Tracking (DBC) which fell 12.6%. The falling stock market was good for iShares Barclays 20+ Year Treasury Bond (TLT) which rose 3.2% this quarter. Technology stocks continued to outperform the rest of the stock market as PowerShares Nasdaq 100 (QQQ) bucked the trend with a gain of 5.5% while iShares Russell 2000 Growth Index (IWO) lost (6.0%). PowerShares DWA Technical Leaders (PDP) rose 0.9% to finish in the middle of the pack.A move towards more defensive stocks pushed Health Care Select Sector SPDR (XLV) up 5.4%.

With emerging markets outperforming developed markets this quarter, iShares FTSE China 25 Index Fund (FXI) was up 3.4%. On the other hand, avoided Europe as iShares MSCI Germany Index (EWG) dropped (11.5%), leaving iShares MSCI Japan Index (EWJ) which fell only (2.2%) as least risky foreign country to invest in.

Our Favorite Mutual Funds, Favorite ETFs, Mutual Fund Portfolios, ETF Investment Portfolios, and Favorite Fidelity Funds have been updated through September 2014.

Be Sociable, Share!