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The best performing funds and sectors in 2017’s first quarter

03 April 2017

FE Trustnet finds out which funds have had the strongest start to 2017, with those focused on emerging markets coming out on top.

By Gary Jackson,

Editor, FE Trustnet

Funds investing in Indian and Chinese equities have posted the highest returns in the opening quarter of 2017, FE Analytics data shows, while commodities have gone on to have a poor start to the year.

The new year started with Donald Trump moving into the White House and investors eyeing a number of political events on the horizon, including the start of the Brexit process and important elections in Europe. Added to this was the debate over whether the reflation trade that marked much of 2016 would continue into 2017.

Data from FE Analytics reveals two sectors share the top spot for the highest average total return in the first quarter of 2017: both the IA Asia Pacific ex Japan and IA China/Greater China peer groups were ahead 11.59 per cent over the three-month period.

 

Source: FE Analytics

The highest return from the IA Asia Pacific ex Japan sector during this time came from Ian Heslop, Mike Servent and Amadeo Alentorn’s Old Mutual Asia Pacific fund, which made 15.42 per cent. This follows a top-quartile 31.99 per cent in 2016.

Other funds from the peer group posting some of the biggest gains include Waverton Asia Pacific, Invesco Perpetual Asian, Schroder Asian Alpha Plus and JB Multistock Asia Focus. All have made more than 14.50 per cent in the quarter.

When it comes to the IA China/Greater China sector, Guinness Best of China – which is managed by Edmund Harriss – tops the tables with its 16.55 per cent total return. This comes after a rise of 22.09 per cent last year.

GAM Star China Equity, Baillie Gifford Greater China, Jul Baer Multistock China Evolution and Matthews Asia China Small Companies are next on the list of top performers, with returns ranging from 13.89 per cent to 15.34 per cent.

Things look slightly different on an individual fund level, however, with Indian equity funds dominating the list of the biggest returns.


 

Source: FE Analytics

Indian equities have enjoyed a strong run since pro-business reformist Narendra Modi was elected prime minister in May 2014. While the MSCI India index did lag MSCI Emerging Markets and MSCI AC World in 2016, it has bounced back this year on the back of continued confidence in Modi and renewed optimism about the global economy.


In addition to Indian and Chinese equities, technology funds feature on the list with two entries: T. Rowe Price Global Technology Equity and Polar Capital Global Technology, both up around 15 per cent.

Technology is one of the cyclical areas of the market that has started to perform strongly as investors eye a move into a more inflationary environment. As we saw on the first page, the IA Technology & Telecommunications sector was the fourth best performer with an average total return of 10.68 per cent.

At the bottom of the performance rankings (aside from money market funds) are IA Global Bonds and IA Targeted Absolute Return, both of which returned 1.11 per cent in the first quarter.

On an individual fund level, the below table shows that funds focused on energy and basic materials stocks have made the biggest losses in the Investment Association this past quarter. This follows a strong 2016 after investors flocked back to these previously-unloved parts of the market.

 

Source: FE Analytics

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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.