It’s been a quiet week on the news front, with few macro concerns gripping the markets and few fund manager moves gripping the industry. The FTSE is once again flirting with its all-time high at 6,863 at time of writing, but it will take something special to see that 7,000 barrier broken.
Luckily for us journalists, we have an abundance of data to work with, helped by Tuesday marking the halfway point for the year – a perfect excuse for reflect on how funds and trusts have gotten on in 2014. A few high profile fund managers have also made our lives easier with some interesting and at times controversial comments.
Here are the five best stories of the week.
Crisis brewing in UK micro-cap stocks, says star manager Harry Nimmo
Nimmo (pictured) and his Standard Life UK Smaller Companies fund has had a torrid time in 2014, while many rivals – namely Giles Hargreave and Gervais Williams – have protected much more effectively against the downside.
Performance of funds and sector in 2014
Source: FE Analytics
Stock specific issues including ASOS and Rightmove have cost Nimmo dear, but he points out that the strong performance of micro stocks, which he doesn’t hold in his fund, have been the biggest contributors to Hargreave and Williams’ outperformance.
Nimmo says not is all well in the specialist area however, and thinks that the huge inflows into these stocks via funds like Marlborough UK Micro Cap Growth is creating a potential liquidity bubble.
“In the long term micro caps is an area that can give you higher returns but it also carries a lot of risk because if the market is going down you are stuck with them,” he said.
Click here for more.
The best- and worst-performing funds of 2014
Exactly what it says on the tin – this in-depth study highlighted that Indian and gold funds have led the way this year, with China and Russia funds bringing up the rear.
Source: FE Analytics
The story highlighted once again the tendency of underperforming funds to rebound in dramatic style; FE data shows that all of the best –performing funds in 2014 lost money last year, even though the MSCI AC World was up more than 20 per cent in 2013.
Will you have to overhaul your portfolio is Labour wins the election?
The general election is just under a year away, but the possible implications it will have on a number of different sectors is significant, as examined by reporter Alex Paget with the help of Jupiter’s Steve Davies.
The effect of a Labour win on sterling is a big talking point according to Davies, who also points to possible big shifts in banks, book-makers and utilities.
Davies says the volatility could create a number of opportunities for stock pickers, so keep an eye out.
“Over the next 12 months, every fund manager in the UK will have keep as close an eye on the opinion polls as they do with profit and loss data,” he said.
Five bearish alternatives to Martin Gray
The ex-manager of CF Miton Special Sits (pictured) was one of the go-to managers for bearish investors or those looking for an insurance policy in a balanced portfolio, so his departure has come as a big blow to many.
Here, we highlight five possible alternatives to Gray, including the likes of FE Alpha Manager Iain Stewart and Troy’s Sebastian Lyon.
The absolute return funds that have lost you money in 2014
Another study reviewing the year so far, this time highlighting the absolute return funds that are in the red in 2014. Among them are the largest and best performers in recent years, such as CF Odey Absolute Return and Paul Marriage’s Schroder UK Absolute Dynamic portfolio.
Particularly relevant from FE Trustnet’s point of view, as FE Research’s Charles Younes warned that investors buying top-performers like Odey may be doing so for the wrong reasons.
The five best stories on FE Trustnet this week
04 July 2014
FE Trustnet editor Joshua Ausden looks back at the stories and studies of the last seven days, highlighting the best of the bunch.
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Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.