Looking back at the best mutual funds through mid-year is not just an exercise in curiosity fulfillment and it’s more than just useful information for mutual fund investors — it’s a glimpse into what ideas are working now and the areas of the market that could carry momentum through the remainder of 2015.
Another thing this list of top mutual funds for the first half of 2015 is not: a showcase of inverse and leveraged mutual funds. The best and worst returns in almost any short-term period you want to analyze will consist of these alternative fund types, which are best reserved for limited and tactical diversification strategies.
And to make our brief list more useful and broader in scope, we highlight one top performer from three different mutual fund categories, which will include one sector fund, one international stock fund and one bond fund.
With that, here are the best mutual funds so far in 2015:
Best Mutual Funds So Far in 2015: Fidelity Select Biotechnology (FBIOX)
The health sector leads the market at mid-year and Fidelity Select Biotechnology (FBIOX) is the best performer.
Biotechnology stocks have been hot in 2015, which leads some investors to steer clear of the health sub-sector. But others are holding on either for a short-term momentum play or as part of a long-term, diversified portfolio.
No matter your reasoning for buying or holding FBIOX, the fund’s leadership in the health sector is nothing new. The performance places Fidelity Select Biotechnology ahead of 99% of all other health sector funds for one-, three-, five- and 10-year returns.
Best Mutual Funds So Far in 2015: Matthews Japan Institutional Fund (MIJFX)
Japanese stocks continue their strength from the Q1 2015 and Matthews Japan Institutional Fund (MIJFX) is at the top of the Japan stock category through Q2.
The Nikkei 225 Index continued to push past 15-year highs and crossed over 20,000 in the second quarter. The Japanese yen is trading at multi-year lows against the U.S. dollar. This has helped pump up the profits for Japanese exporters, such as MIJFX top holding, Toyota (TM).
Whether the Japan strength continues in 2015 remains unclear, but a strong dollar could continue to support Japanese stocks and the mutual funds that invest in them.
MIJFX is an institutional share class fund with a minimum initial investment of $3 million. For investors not quite able to cross that first purchase hurdle, there’s an investor share class, MJFOX, with a $2,500 minimum.
Best Mutual Funds So Far in 2015: Ashmore Emerging Markets Corporate Debt Fund (EMCIX)
While the broad bond market saw negative returns through the second quarter, Ashmore Emerging Markets Corporate Debt Fund (EMCIX) put in a healthy gain.
The mid-year jump of 8.6% crushes that of the Barclays Aggregate Bond Index, which has posted a year-to-date loss of 0.5%.
The top two countries for the EMCIX portfolio of bond holdings are Cayman Islands and Netherlands, which tells part of the story for the fund’s strong performance. The EMCIX portfolio managers, like individual fixed income investors, are looking for yield outside of the United States and Europe.
The 30-day SEC yield for EMCIX is a whopping 10.4%. But is the price risk worth the yield? That should be the first question investors should be asking themselves with regard to high-yield and global bond mutual funds going into the second half of 2015.
The minimum initial investment for EMCIX is $1 million but there are several other share classes offered by Ashmore Funds with various fee levels and lower minimums.
As of this writing, Kent Thune did not personally hold a position in any of the aforementioned securities. His No. 1 holding is his privately held investment advisory firm on Hilton Head Island, SC. Under no circumstances does this information represent a recommendation to buy or sell securities.