Insightful Investing

Financial markets in Europe and Japan rebounded in April, pushing the dollar back down and helping International Stock funds be our strongest performers. Leading the pack was Driehaus International Small Cap Growth (DRIOX) which gained 8.9%, followed closely by Wasatch Emerging Markets Small Cap (WAEMX) which added 8.7%.

It was also a good month for our Real Estate funds too, with Cohen & Steers Realty Shares (CSRSX) earning 7.8% and Neuberger Berman Real Estate (NBRFX) picking up 7.7%. Our top commodities fund was AQR Managed Futures Strategy (AQMNX) which returned 5.1% in April.

Back in the USA, all of our stock funds had positive returns. Parnassus Small Cap (PARSX) was up 5.8%, Fidelity Low-Priced Stock (FLPSX) earned of 5.6%, and Westcore Select (WTSLX) gained 5.1% to lead domestic equities.

The falling US dollar and rising commodities prices helped to push Global Bonds and Inflation Protected Bonds higher. The result was see in our best performing Bond funds as Dreyfus International Bond (DIBRX) gained 4.0%, PIMCO Real Return (PRRDX) earned 3.0% and Fidelity Inflation-Protected Bond (FINPX) tacked on 2.8% this month.
Once again, the big winners in the ETF space this quarter were commodity funds. If you thought the numbers were big in the first quarter, they were even better for this month. The iShares Silver Trust (SLV) gained a stellar 27.5% in April, pushing its rise for the last 12 months to an astronomical 156.7%. PowerShares DB Precious Metals (DBP) was next in line with a gain of 13.6%. Another notable winner in April was SPDR S&P Biotech (XBI) which added 10.5%.

The rebound in Europe was led by iShares MSCI Germany Index (EWG), a gainer of 10.9% and safe haven iShares MSCI Switzerland Index (EWL) which picked up 10.1% in April. The only loser internationally was Market Vectors Russia (RSX) which was down 1.1% in spite of the fact that the PowerShares DB US Dollar Index Bullish (UUP) was down 3.9%.

Surprisingly, the Large Cap Value oriented SPDR Dow Jones Industrial Average (DIA) was our leading domestic stock ETF with a gain of 4.1%, followed closely by a gain of 4.0% from iShares S&P SmallCap 600 Growth (IJT). On the low end of the scale, iShares S&P SmallCap 600 Value Index (IJS) earned only 1.1% this month.

As you might expect after looking at our Mutual Fund results, SPDR Barclays Capital Intl Corp Bond (IBND), SPDR DB International Inflation Protected Bond (WIP), and SPDR Barclays Capital International Treasury Bond (BWX) were our leading Bond ETFs, gaining 6.3%, 5.0%, and 4.9% respectively.

Our May 2011 Mutual Fund Portfolios, ETF Investment Portfolios, and Best Fidelity Funds have been updated through April 2011. The Mutual Funds in our Mutual Fund Portfolios are chosen from our Best Mutual Funds. The ETF’s in our ETF Investment Portfolios are chosen from our List of 100 Best Exchange Traded Funds. The investment performance history of our mutual fund portfolios and ETF investment portfolios are tracked on our investment portfolio performance page.

April was a fairly quiet month as financial markets in Europe and Japan bounced back somewhat from a difficult first quarter of 2011. International Stocks led the way, picking up 6.0% this month, followed by Real Estate, which gained 5.9%.

Domestically, style played a bigger role in performance than market cap as growth stocks continue to lead the market higher. Small Cap Growth stocks topped the list with a gain of 4.1% while Large Cap stocks gained 3.0% this month. On the other hand, Small Cap Value stocks only earned a respectable 1.6% in April.

Commodity prices continued to push higher in April, a clear sign of increasing inflation that helped to push TIPS up around the world. TIPS earned 2.5% this month, making them the strongest performing domestic bond sector this month. Thanks to a falling dollar, though, international bonds performed even better for US investors.