The story so far…US on top

As the end of the 3rd quarter is upon us, we review the best and worst funds for the year to date. Did you profit from the sectors and funds with potential through 2018? Or are you still dithering about duds?

 

 

 

The top individual funds are dominated by US and US-focussed technology funds (in line with the trend identified last week at a sector level). Baillie Gifford’s funds take the top two spots, and they have a strong preference for the headline grabbing tech names like the FAANGs and Tesla.

 

The funds which aren’t in the North American sectors nevertheless have big weightings to the US. AXA’s Global Technology fund has 89% in the US and counts Alphabet, Apple, Facebook and Amazon amongst its top 10 holdings. Together, those stocks make up 25% of the fund.

 

Blue Whale Growth and Baillie Gifford Global Discovery both have big US weightings, in excess of 60%. SLI Global Smaller Companies has a more “global” look, with only 41% in the US.

 

 

At the bottom table, an Absolute Return fund makes an appearance yet again. City Financial Absolute Equity is the worst fund year-to-date, down nearly 25%. The Absolute Return sector is notoriously mixed up – buyer beware (more here).

 

More predictably, the rest of the bottom funds are either emerging market or commodity funds with a focus on gold and precious metals. Most Indian funds have been in the dog-house for a while now, Jupiter in particular. As a country that imports 80% of its oil it has been hurt by the strong dollar and rising price of oil, with the bill for importing oil set to rise by around 25% this year.

 

 

We also show the best funds from the other popular sectors.

 

Schroder Income tops the Equity Income sector, a good return for a Value focussed fund – buying what’s undervalued by the market.  SDL UK Buffettology tops the UK All Companies sectors year-to-date. It’s not quite a Value fund but does actively avoid over-valued investments.

 

Liontrust UK Smaller Companies is the best of the UK Smaller Companies sector, with an impressive 13.7% return year-to-date.  This is one of our long-term favourites as it gives investors access to young, growing UK technology companies.

 

There have been good returns for some funds in Europe with both the main sector and the smaller companies sector best funds showing strong returns. 

 

Smaller companies are often the “canary in the coalmine” so while good performance by these sectors is positive keep an eye out for signs of weakness that could pre-empt a downturn.

 

It’s not a surprise to see Asia, emerging markets and China struggling. The best China fund is only up 0.22%. Newton Asian Income is the best fund in the Asia-Pacific ex-Japan sector. In a tough period, it’s good to see one of our Income picks doing relatively well. There are great opportunities for income growth in the Asian region, which we’ve covered more here. 

 

For long term investors, the poor performance of Asian and Chinese markets can be an opportunity to drip in on weakness – we will return to that one.

 

Japan and Japanese Smaller Companies have seen good returns, with JPM Japan and Baillie Gifford Japanese Smaller Companies up 9.86% and 14.08% respectively.

 

The Specialist sector is intentionally mixed up, with its greatest focus on funds with a very tight focus which don’t easily fit into other sectors. It’s always interesting to see what’s topping it. Health and Biotech funds take the top two places, with AXA Framlington Health taking the top spot (up 14.45%). We wrote more on biotech earlier in the year – have a look here for the detail.

 

These reviews are interesting but they are backward looking, so don’t get too side-tracked. Focus on your process for selecting funds if you want to achieve your potential.

 

 

 

 

Fund	Sector	Year to date	6 months
Baillie Gifford American	North America	38.16	21.26
Baillie Gifford Global Discovery	Global	29.38	19.26
Artemis US Smaller Companies	North American Smaller Companies	28.16	26.44
JPM US Smaller Companies	North American Smaller Companies	23.88	18.49
AXA Framlington American Growth	North America	23.45	18.86
AXA Framlington Global Technology	Technology & Telecommunications	23.11	12.43
UBS US Growth	North America	21.54	16.78
Blue Whale Growth	Global	20.21	14.72
Quilter Investors US Equity Growth	North America	19.97	15.2
SLI Global Smaller Companies	Global	19.94	13.44

 

Fund	Sector	Year to date	6 months
CFP SDL UK Buffettology TR in GB	UK All	11.22	11.79
Schroder Income	UK Equity Income	5.56	5.86
Liontrust UK Smaller Companies	UK Smaller	13.73	12.68
Jupiter European	Europe ex-UK	14.77	15.36
Aberdeen European Smaller Companies Equity	European Smaller Companies	17.04	16.94
Newton Asian Income	Asia Pacific ex-Japan	0.85	4.77
JPM Japan	Japan	9.86	6.32
Baillie Gifford Japanese Smaller Cos.	Japanese Smaller Companies	14.08	5.66
FP Henderson Rowe FTSE RAFI Ems	Global Emerging Markets	-1.81	-3.99
Invesco Perpetual Hong Kong & China	China	0.22	-0.37
AXA Framlington Health	Specialist	14.45	18.41