Prevailing geographical and sector themes are clearly
driving fund performance this year, with various emerging market and commodity offerings leading the life market.
Source: Trustnet.com
While various single country vehicles are the very best performers in the year to 19 November, several mirrors of the
JPMorgan Natural Resources fund are up over 90 per cent.
Manager
Ian Henderson said the broadening out of positive economic data to include the developed world has helped maintain a healthy recovery in the natural resources sector. "Base metal prices have continued to rise, reflecting evidence that industrial activity in the developed world is picking up," he added.
Over the third quarter, he noted the oil price moved little following its strong rise earlier in the year and gold also slowed its ascent despite holding steady above the $1,000 mark.
Looking forward,
Henderson said the pace and extent of the base metals rally has been significant, which means there is some risk the sector could endure some short-term volatility.
"Valuations are not as attractive as previously but we expect real consumption to come through in the second half of 2009, helping to boost earnings," he added.
"We see any pullback as a buying opportunity as we believe prices will not remain at this level given the longer-term investment thesis. From an asset allocation point of view, a balanced approach is the most desired at this point as base metals and energy benefit from optimism about the economic outlook while gold acts as a hedge should the environment deteriorate in the short-term."
Meanwhile,
Neptune’s Russia and Greater Russia fund has also enjoyed a spectacular 2009 so far, with manager
Robin Geffen boasting growth of more than 90 per cent. He said the Russian stock market’s remarkable performance saw strong returns across the majority of sectors in the third quarter.
"Specifically, our consumer staple stock picks, the fund’s largest sector overweight, continue to do well, with some of our holdings benefiting from M&A activity," he added.
"Over the past 15 months, it has been the oligarchs that have been most affected by the global financial crisis. Conversely, the domestic consumer, who has no exposure to credit cards and therefore no reliance on debt, has been much more resilient."
With another three years before voters will go to the polls, Geffen added that Russia’s diarchy is also very stable.
"President Medvedev contributed significantly to policy reform during Putin's presidency and is now providing crucial policy continuity under his own tenure," he said.
"He has been very active in embedding his policies with both Germany and France while forming strategic alliances with the wider EU, and Russia’s relations with China also continue to strengthen." Geffen notes significant trade deals are forming an economic symbiosis between the two countries, with China proving to be a substantial consumer of Russia’s enormous natural resources.
Trading on a P/E ratio of nine times, Russia is currently the cheapest of the BRIC (Brazil, Russia, India, China) economies and Neptune said the country offers potential for significant returns over the medium to long-term.