After a sharp sell-off on Monday and volatile trading Tuesday, we take a look at some of the funds that have performed best and worst in the midst of the market maelstrom.
The S&P 500 was down 4.1% or 113 points, while the Dow Jones Industrial Average plummeted 4.6%, or 1175 points at the market’s close on Monday.
Both indices rebounded slightly on Tuesday morning after initially falling, the S&P was up 0.38% or 10 points, meanwhile the Dow pared its losses and was up 1.56%, or 380 points for the day at mid-afternoon Tuesday.
Within the S&P, every industrial sector was down for the day, with financials falling the furthest (down 5.4%), followed by industrials (down 4.54%) and healthcare (down 4.43%) on Monday.
The Cboe Volatility index or VIX, hit its highest level since August 2015 on Monday, and then went higher again on Tuesday, spiking to as high as 50 early Tuesday morning before falling to 37 by midday.
Jeffrey Ptak, head of global manager research at Morningstar, put together a list of the 50 funds to have performed the best and worst over the last week, ending last night.
He excluded leveraged funds, for the most part, and used all funds' oldest share classes only.
Ptak, on Twitter, highlighted that most of the funds on the list were 'tiny, niche.'
Here are the bottom five of Ptak's wider list.
5 funds with the worst returns since January 24, 2018
Source: Morningstar Direct
|Mutual fund||1 Day||1 Week||1/24/18 - 2/5/18||AUM|
|ABR Dynamic Short Volatility Instl||-30.24||-33.27||-35.12||282,694|
|Catalyst Time Value Trading I||-22.99||-24.39||-24.76||2,410,852|
|Catalyst Macro Strategy I||-7.91||-13.94||-18.04||18,495,193|
|Grant Park Absolute Return I||-9.93||-17.01||-17.86||35,646,204|
Low volatility funds were hit hard by the VIX's spike, with three leveraged or inverse ETPs forced to terminate trading after suffering heavy losses. It was a trend that also impacted the list's biggest faller.
In a single day, the ABR Dynamic Short Volatility fund, comprised primarily of VIX Index futures, lost its bet on the downward trend of volatility assets, losing -30.24%, taking its drop from January 24 to -33.27%.
It should be pointed out that the ABR fund is designed to complement a portfolio of Treasuries, futures and other exchange-traded products, rather than acting on a standalone basis.
The largest fund on the list above, the still incredibly small Chou Opportunity fund, did not suffer too badly on Monday but had endured a difficult week leading up to the sell-off.
The multi-asset strategy, which invests in developed and emerging market equities as well as debt instruments, declined just -2.98% on Monday, February 5, but gave up more than 20% since January 24 as a result of its allocations to cyclical sectors like basic materials and financials that have had a more pronounced decline since Friday.
5 funds with the best returns since January 24, 2018
Source: Morningstar Direct
|Mutual fund||1 Day||1 week||1/24/18||AUM|
|Navigator Sentry Managed Volatility I||51.33||69.4||66.91||9,040,584|
|Context Strategic Global Equity Instl||26.86||22.94||22.41||30,369,560|
|ProFunds Short Oil & Gas Inv||4.24||9.53||11.82||3,548,960|
|Comstock Capital Value A||6.63||10.52||10.99||19,393,863|
|Rydex Inverse Russell 2000 Strategy C||3.67||6.99||7.82||4,959,874|
Ptak also tweeted a list of the 50 best performing funds since January 24.
Again, the names of the top five and wider list of 50 are mostly small and niche strategies.
The Navigator Sentry Managed Volatility fund, managed by Clark Capital Group, advanced by 51.33% as it benefited from its hedging vehicles.
Market contrarians were also vindicated as they were able to exploit their contrarian bets against the US stock market.
The Comstock Capital Value fund was up by 69.4% for the week ending February 5.
Not all names on the list were unknown, however.
In the top 20 was the Hussman Strategic Growth fund, which saw some relief after persistent underperformance due to its notoriously defensive positioning that has resulted in a -9.81% annualized three-year return, according to Morningstar.
However, since January 24 the fund has gained 4.94% as bets against continued growth and low volatility paid off.