Commodity, energy investment funds on a comeback

If your clients have been asking you to get out of the market during this turbulent year, you might point them to the big gains they’ve enjoyed in just the past 30 days.

Large blend funds — your basic large-company, growth-at-a-reasonable-price funds that are a staple in most investors’ portfolios — have jumped 7.56%, according to Morningstar, the Chicago investment trackers.

For instance, Longleaf Partners (LLPFX) has gained 16.86% the past 30 days, making it the best-performing large-blend fund while providing some relief for the $3.5 billion fund’s shareholders. The fund has still clocked a 16.84% loss for the past 12 months.

But the most eye-opening gains have come from sector funds, particularly those that have been savaged the most the past 12 months. Long-suffering energy limited partnership funds, for example, have leaped 21.46% the past 30 days. Oppenheimer SteelPath MLP Alpha Plus (MLPX) was the top rebounder, soaring 33.8%.

Long-term investors in the funds, which invest mainly in oil and gas pipelines, are still pumping mud: The average energy limited partnership fund is down 39.09% for the past 12 months. Nevertheless, the funds recent gains have taken away some of the pain inflicted by plunging energy prices.

Not surprisingly, funds that invest in energy and natural resources have risen smartly as well, with energy equity funds gaining 14.40% and natural resources funds rising 13.13%. The two categories include behemoths like the $7.9 billion Vanguard Energy (VGENX), up 13.07% the past 30 days, and RS Global Natural Resources (RSNRX), up 25.35%.

Similarly, funds that focus on gold mining stocks have jumped 19.54% the past 30 days, easing some of the hammering they have taken during the past three years. Franklin Gold and Precious Metals (FKRCX) has unearthed a 26.23% gain, while Vanguard Precious Metals and Mining (VGPMX) has struck a 22.09% return.

Gold funds have been rallying along with the yellow metal, which has risen to about $1,258 an ounce from $1,098 at the end of 2015. The funds are still minting an average annual loss of 17.13% the past five years, however, thanks to gold’s tumble from all-time highs in 2011.

Health and biotech funds are the laggards among sector funds, gaining just 4.26% on average, but even those are showing some signs of a rebound. The biotech sector jumped up 2% on Monday, but has dropped back this week.

[Source:- Investmentnews]