Best & Worst investments since 1987

There aren’t a vast number of funds which survive intact from 1987, as many have been closed, or merged since ’87. Nonetheless the analysis here is interesting as a look back at what's done well and what hasn't since the Great Crash of 1987.

That a China fund is at the top, and by a wide margin, might surprise quite a few – but it was very early days for China re-joining the world economy. Those who lived through the technology crash of 1999-2003 might also be surprised to see a technology feature. Again it was a very early stage in the advance of modern technology, and the extraordinary rise of the FAANGS in recent years has driven the recovery of this once battered sector.

The sprinkling of US, European, and Asian funds are less surprising.

Japan is the big feature in the laggards, 4 out of 10 funds. Their market peaked in 1989, and is still 50% below that peak. Yet it is now one of the most attractive global markets.

There are two bond funds despite a bond bull market lasting more than 30 years. The two equity income funds will also surprise – this is a winning long term strategy, but not if you are in the wrong funds, as we continually highlight.

Three funds with global remits also highlight another truism (with only a few exceptions) – global funds tend to be average performers at best, and more focussed funds should be preferred for most investors. The ethical funds? Again a regular theme of ours – ethical investing typically comes at a very heavy price.

Overall the bottom 10 sends a very strong message that “buy and hold” (which is really “buy and forget”) is a convenient mantra for some in the investment industry but is a road to poverty for many investors. 

FURTHER READING

• How far down for the stock market? Are you prepared?
• New portfolio. Profit opportunity in Japan [Gold Members]
• Big Brains. No Common (Part 2) [Gold Members]

Table 1: Best Funds

Table 2: Worst Funds