Only one fund in the emerging markets and Asia Pacific sectors has made money since the sell-off, and the average emerging market fund is almost 11 per cent down.
Sterling-denominated bond funds have managed to generate positive returns, however, despite the fears at the time that investors were seeing the end of a multi-decade bull market in fixed interest.
The average IMA Global Emerging Markets fund has lost 10.87 per cent of its value since the sell-off 12 months ago, according to our data.
Performance of sectors since 22 May 2013
Source: FE Analytics
The average IMA Asia Pacific ex Japan fund is down 8.12 per cent while the average global emerging market bond fund is down 11.87 per cent.
The sell-off began when then Fed chairman Ben Bernanke raised the possibility of as slowdown in the rate of QE, and led to a sell-off in bond and equity markets.
Part of the problem for managers was the element of surprise: the market hadn’t expected the hints that Bernanke dropped and few portfolios were prepared.
Even if they had been, few sectors have generated positive numbers over the past year, meaning there was little managers could do from a strategic point of view.
The FTSE World Asia Pacific ex Japan Software sector is up 65.32 per cent over the period, and many of the funds that have performed the best have been overweight this area. Apart from this only 12 out of 51 sectors are in positive territory.
Source: FE Analytics
In the emerging markets it is a similar story, with the internet and software related sectors up, plus automobiles and aerospace.
The worst hit sectors include REITs and retailers along with defensive areas such as consumer staples and utilities, meaning there were few places for managers to hide without launching a tech fund.
Jonathan Pines’ $600m Hermes Asia ex Japan Equity is the portfolio that has bucked the trend, returning 10.27 per cent over the period.
Performance of fund vs sector and index since 22 May 2013
Source: FE Analytics
Pines has achieved this despite being underweight IT and overweight mainland China which has had a poor year. A large overweight in Korea, up 1.43 per cent over the period, has helped, but stock selection has clearly been good as well.
The next best-performing fund over the period is the Veritas Asian fund, which is essentially flat, down 0.32 per cent over the year. Allianz Total Return Asian Equity is down just 0.54 per cent.
In the emerging markets sector the best-performing fund lost 4.09 per cent – Somerset Emerging markets Small Cap.
Standard Life Global Emerging Markets Equity is down just 4.53 per cent and Carmignac Emergents 4.69 per cent.
In 2014 the average IMA Global Emerging Markets fund has returned less than the FTSE although the IMA Asia Pacific ex Japan sector is ahead and the IMA Global Emerging Markets Bond sector has done best of all.
Performance of sectors vs index in 2014
Source: FE Analytics
Fixed income has been in demand this year as investors have wobbled on the prospects for future stock market growth.
In fact, our data shows that investors in bonds have made steady gains over the past 12 months after the initial sell-off of last May.
Investors in the IMA Sterling High Yield sector have made 5.91 per cent and the IMA Sterling Strategic Bond 3.02 per cent.
Gilts are down over the period as a whole but u since the initial crisis and in the year-to-date.
Performance of sectors since 22 May 2013
Source: FE Analytics
The top –performing bond fund during this period was the GAM Star Credit opportunities fund, which made 12.68 per cent.
The fund focuses on investment grade credit and has its largest weighting in perpetual bonds which pay a coupon in perpetuity.
TwentyFour Dynamic Bond has returned 10.93 per cent over the same period and TwentyFour Focus Bond 10 per cent exactly.
Only 13 out of 76 funds in the IMA Sterling Strategic Bond sector have failed to make money.
