Six months on, the picture has changed from a fairly positive outlook to a murkier one – even if the FTSE 100 is up 3 per cent for the day at the time of writing. Markets have been highly volatile, with the UK market suffering a significant correction last month and continuing to slide this week on fears over Portuguese bond yields.
Year-to-date performance of funds
Source: FE Analytics
Our funds have had mixed fortunes, but most of them have made money this year, apart from Aberdeen Emerging Markets, which was hard hit in the downturn.
Aberdeen Emerging Markets
Production editor Anthony Luzio, who selected the fund at the start of the year, stresses that he is unfazed by the short-term losses.
Luzio expected the year to be volatile for emerging markets and says he is prepared to ride it out over the long-term, adding that the sector should pick up towards the end of the year.
Aberdeen Emerging Markets has undoubtedly been a solid long-term bet over the last decade.
The five crown-rated fund is the best performer in its sector during this time, returning 473.68 per cent compared with the MSCI Emerging Markets index’s 281.51 per cent. The sector has made 271.73 per cent.
However, the fund is sitting in the second quartile year-to-date, down 2.62 per cent so far, compared with losses of 2.43 per cent from the sector and 3.93 per cent from the index.
Chelsea Financial's Darius McDermott previously told FE Trustnet that the recent selloff in emerging markets represents a good buying opportunity, and that it could offer an unprecedented chance to buy back into the soft-closed Aberdeen fund.
F&C Global Smaller Companies IT
Senior reporter Thomas McMahon chose the F&C Global Smaller Companies IT at the start of the year because he believed smaller companies would continue to outperform their large cap counterparts.
While the trust has been hit by the downturn, it has held up better than the other funds selected by the team, lending further credence to the view that trusts tend to outperform their open-ended counterparts.
So far this year the five crown-rated portfolio has picked up 17.51 per cent, outperforming both the IT Global Growth sector and its own composite benchmark – a mix between the MSCI World ex UK Smaller Companies index and the Hoare Govett UK Smaller Companies ex ITs index.
The trust has also been a strong long-term bet as well, outperforming both measures over one, three, five and 10 years.
Over the last decade, the trust has picked up 445.69 per cent, over 200 percentage points more than the sector and index.
Performance of trust vs sector and index over 10yrs
Source: FE Analytics
The trust is trading on a small discount of 0.5 per cent and has no gearing. It has a nominal dividend yield of 0.9 per cent and ongoing charges of 1.21 per cent, including a performance fee.
Henderson UK Equity Income
Features editor Jenna Voigt selected the five crown-rated Henderson UK Equity Income fund because she was not convinced the rally in the latter half of 2012 was sustainable through the year.
The fund has a good balance between growth and capital and has held up fairly well in the recent downturn.
It has gained 13.7 per cent since the start of the year, outperforming the IMA UK Equity Income sector and FTSE All Share, which have picked up 12.07 per cent and 10.04 per cent respectively.
The fund is also a solid long-term bet, having outperformed both measures over one, three, five and 10 years, with the added benefit of a 3.1 per cent yield.
Henderson UK Equity Income requires a minimum investment of £1,000 and has ongoing charges of 1.75 per cent.
CF Eden Select Opportunities
Reporter Alex Paget was more bullish at the start of the year, expecting the equity rally to continue to gather momentum.
He selected the CF Eden UK Select Opportunities fund because it has a large exposure to mid cap stocks, which rallied strongly towards the end of last year. It also gained momentum from a rally in financial stocks, which its highest weighting is to.
The recently launched fund has lagged its peers so far this year, gaining just 9.74 per cent compared with the IMA UK All Companies sector average’s 11.59 per cent, and the FTSE All Share’s 10.04 per cent.
The fund has outperformed the sector and index since launch in September 2011, gaining 31.83 per cent while the sector and index are up 30.02 per cent and 26.7 per cent respectively.
Performance of fund vs sector and index since launch
Source: FE Analytics
CF Eden Select Opps requires a minimum investment of £1,000 and has ongoing charges of 2.31 per cent.
Marlborough UK Micro Cap Growth
Editor Joshua Ausden decided to continue riding the rally in small to mid cap stocks, selecting FE Alpha Manager Giles Hargreave’s Marlborough UK Micro Cap Growth fund.
So far this year, the fund’s returns have been lacklustre, up just 7.59 per cent; however, its long-term outperformance cannot be ignored.
The five crown-rated fund is top-quartile over three and five years, having gained 110.89 per cent over the longer period – almost twice as much as the IMA UK Smaller Companies sector average.
However, it has fallen into the bottom quartile over the last 12 months.
The fund requires a minimum investment of £1,000 and has ongoing charges of 1.54 per cent.
What fund would you back to be a top performer for the second half of the year? Tell us in the comments section below, or email us at editorial@financialexpress.net