Asian funds dominate the top table this month along with Europe, technology and an equity & bond fund. A mix of specialist funds make up the bottom table along with UK and US funds and “lower risk” absolute return and index-linked gilts.
What’s Hot?
- Developed Asia (Japan and Korea) make up 6/10 funds in the Hot table this month.
- Two Japanese smaller companies funds (one of our Trades of the Decade) also feature.
- Korea is becoming more popular as recent scandals recede in the rear-view mirror. Companies starting to pay more dividends to investors also raises confidence.
- European growth has been reassuring investors despite rumbling Italian and Greek crises. Three European funds make it into the table (and European smaller companies have been one of the best performers year-to-date).
- Global Technology puts in an appearance as investors keep the faith with the FANGS (Facebook, Amazon, Netflix and Google). Amazon’s share price recently went through the $1000 per share barrier up from $749 at the start of the year.
What’s Not?
- The UK has continued to sit under a Brexit cloud. Uncertainty over the result of the upcoming General Election hasn’t helped. Unsurprisingly, UK equity funds and index-linked gilts both sit in the bottom table.
- US smaller companies have continued struggling as controversy continues to weigh on investors’ faith in Trump’s ability to gain support for his controversial agenda. Investors don’t like inconsistency or uncertainty
- Biotech and Natural Resources also feature. Biotech has continued to suffer. A large US exposure coupled with uncertainty over US healthcare reform haven’t helped…
- …while Russia and energy funds wobble in line with the oil price. OPEC (the oil cartel) failed to live up to investors’ hopes of deeper production cuts.
- Longer-term, increasing efficiency and rapid development of alternative energy sources and electric vehicles could mean the oil industry’s predictions of future oil demand may prove ambitious…
- India makes up the last of the Not Hot table. One of our Trades of the Decade, periods of weakness are a good opportunity to add to holdings.
FURTHER READING
Table 1: What’s Hot?
|
Manager
|
Fund
|
Sector
|
Last Month Performance
|
|
Legg Mason
|
Japan Equity
|
Japan
|
9.28
|
|
Baring
|
Korea Trust
|
Specialist
|
9.22
|
|
Fidelity
|
Japan Smaller Companies
|
Japan
|
8.55
|
|
CF Odey
|
Continental European
|
Flexible Investment
|
8.34
|
|
Baillie Gifford
|
Pacific
|
Asia Pacific Ex Japan
|
8.04
|
|
Baillie Gifford
|
Japanese Smaller Companies
|
Japanese Smaller Cos
|
7.74
|
|
AXA Framlington
|
Global Technology
|
Technology & Telecos
|
7.60
|
|
JPM
|
Japan
|
Japan
|
7.54
|
|
Schroder
|
European Alpha Income
|
Europe Ex UK
|
7.35
|
|
Fidelity
|
European
|
Europe Ex UK
|
7.21
|
Table 2: What’s Not?
|
Manager
|
Fund
|
Sector
|
Last Month
Performance
|
|
AXA Framlington
|
Biotech
|
Specialist
|
-4.53
|
|
Neptune
|
UK Mid Cap
|
UK All Companies
|
-3.64
|
|
Thesis TM Sanditon
|
UK Select
|
Targeted Absolute Return
|
-3.07
|
|
Legg Mason IF Royce
|
US Smaller Companies
|
North Am Smaller Cos
|
-2.64
|
|
Neptune
|
Russia & Greater Russia
|
Specialist
|
-2.38
|
|
Investec
|
Global Energy
|
Specialist
|
-2.22
|
|
Vanguard
|
UK Inflation Linked Gilt Index
|
UK Index Linked Gilts
|
-1.86
|
|
AXA
|
Sterling Index Linked Bond
|
UK Index Linked Gilts
|
-1.69
|
|
Jupiter
|
India
|
Specialist
|
-1.47
|
|
Investec
|
Enhanced Natural Resources
|
Specialist
|
-1.21
|