After an intense week for the financial markets, marked mainly by the election of a new American president, Joe Biden, and after the enthusiasm caused by Pfizer with its positive results for the COVID-19 vaccine, we review how US equity funds performed and which ones had the largest gains in the last week, and so far in 2020.
North American investors have withdrawn $220.6 billion from US equity funds in 2020, according to Morningstar and data as of the end of September. Despite this, the S&P 500 and Nasdaq indices continue to reach new heights. Last week alone, as the election voting tally came to a climax, the S&P 500 index rose 7%.
US equity funds with the best 1-week performance
Here we take a look at the US equity funds that have had the best performance in the past week, mostly notably benefiting from a Biden victory and the Pfizer vaccine announcement.
|LU1169590202||Wells Fargo US Select Equity||6,47%|
|IE00B2B35T50||Janus Henderson US Strategic Value||5,62%|
|IE00B5ZXDG51||CRM US Equity Opportunities||5,54%|
|IE00BD5M7221||BNY Mellon US Equity Income||4,01%|
|IE00B7XCGB41||Neuberger Berman US Multi Cap Opportunities||3,52%|
Morningstar Category: USA equities Cap. Flexible; previous week’s returns (November 9th to 13th 2020).
- Wells Fargo US Select Equity: The fund’s performance over the past week has been very positive, in part due to its high weighting of sectors such as technology (24.71%) and healthcare (12.83%).
- Janus Henderson US Strategic Value: The fund has a defensive approach when it comes to positioning the portfolio and follows a disciplined process of analysis by its manager, Ted Thome. The positive news about the progress in the coronavirus vaccine has had a positive impact on the fund’s profitability in the short term as it has more than 16% of the portfolio in the healthcare sector.
- CRM US Equity Opportunities: American manager Cramer Rosenthal McGlynn has this US equity fund managed by Jeffrey Reich and Jay Abramson. The positioning of the portfolio is mainly focused on mid-cap US companies, although among its main positions we can also find titles such as Microsoft. Currently the portfolio has 11.65% exposure to the health sector.
- BNY Mellon US Equity Income Fund: Since 1933, a Democratic President with a divided congress produces above average in the S&P 500. It is important to look at the short term and long term implications of a dividend government. On the one hand, a smaller stimulus package is a short term negative. But, with the virus expanding in the U.S., politicians will be forced to provide additional stimulus and President-elect Biden and Majority leader McConnell have a good working relationship. Longer term, low corporate and personal tax rates will continue which will be a positive for consumer and corporate confidence. This should lead to improving economic activity. We should also mention that today Vaccine news is dominating the news flow and we believe will be the most important consideration for sector positioning. The market is starting to broaden out to more value and cyclical sectors which we believe will continue. With the prospect of a vaccine with continued monetary and fiscal stimulus, inflation expectations should increase accompanied by higher interest rates. Cyclical sectors should outperform with the Financial sector as the big beneficiary. In this sense, Equities continue to be more attractive than bonds.
- Neuberger Berman US Multi Cap Opportunities: The Neuberger Berman US Multi Cap Opportunities Fund has benefitted as the US economic recovery has been more robust than widely predicted. The US economy continues to display signs of improvement. Third quarter US GDP grew a record 33.1%, recovering at a pace substantially higher than where expectations were a few months ago. The US has added jobs in 6 straight months, and the unemployment rate has fallen to 6.9%, also well ahead of expectations from earlier in the year. The current low interest rate environment is supportive of continued growth. An important factor in the continued recovery will be the availability and distribution of a COVID-19 vaccine. The recent announcement by Pfizer, a core Fund holding, that their vaccine candidate proved to be more than 90% effective bodes well for the US economy. The 90% efficacy is well above expectations. Pfizer will potentially receive approval for emergency use authorization of the vaccine in the United States within weeks. Pfizer expects to supply 50 million doses of the vaccine globally in 2020, and is prepared to roll-out distribution to healthcare workers and others in need once approval is received. Pfizer expects to manufacture 1.3 billion doses of the vaccine next year, which will be distributed over the course of 2021. This is a big step forward in resolving the COVID-19 pandemic. As vaccination efforts begin, the US economy will continue to reopen, and many people will be able to resume participating in life experiences in a more normal manner. This should benefit US corporate earnings as we approach the Spring/Summer of 2021. We believe the Neuberger Berman US Multi Cap Opportunities Fund is well positioned for this hopeful reality.
US Equity funds with the best performance in 2020
We cannot forget to mention the US equity funds that have had the best performance so far in 2020, obtaining returns of over 80%.
|IE00B8HW2209||Baillie Gifford Worldwide US Equity Growth (USD)||83,07%|
|LU0042381250||Morgan Stanley Investment Funds – US Growth (USD)||82,75%|
Morningstar Category: USA equities Cap. Large Growth; returns 2020 as of a November 13th 2020.