While three months can provide little more than a snapshot, performance in the first quarter can sometimes have a notable impact on a fund’s annual return.
Last year, emerging market-focused equity funds were among those recording strong gains, a theme that has continued during the first quarter of 2017.
The IA Asia Pacific ex Japan, IA China/Greater China and IA Global Emerging Markets sectors were the top performing peer groups during 2017's opening three months with average returns in double-digit territory.
Longer-term, the IA Asia Pacific ex Japan sector stands out for having delivered strong returns for three consecutive first quarters, along with the IA Japanese Smaller Companies sector.
Below FE Trustnet looks at some of the most consistent performers of recent years and highlights several funds with five consecutive positive Q1 top quartile performances or more and how it has affected their annual performance. Of course, it must be kept in mind that past performance is no guide to future returns.
This excludes funds in sectors such as IA Targeted Absolute Return, IA Unclassified and the new IA Managed Volatility, where sector comparisons are not appropriate.
Baillie Gifford European
The five FE Crown-rated Baillie Gifford European fund has a strong record, having delivered top quartile numbers in every first quarter since 2012.
The fund is co-managed by Thomas Coutts, Stephen Paice, Moritz Sitte and Tom Walsh. It aims to produce “attractive capital growth over the long term” in continental European and Irish Republic stocks.
Fund vs sector & benchmark in Q1 2017
Source: FE Analytics
Its strongest first quarter performance was in 2013, when it recorded a 14.93 per cent rise against a return of 14.35 per cent for the average sector fund.
When it has delivered a top quartile Q1 performance, the fund has been a top quartile performer in three calendar years: 2015, 2013 and 2012. In 2016, a 23.67 per cent return was only good enough for a second quartile performance while a 1.34 per cent loss in 2014 made it a bottom quartile performer.
Over five years, the fund has returned 109.56 per cent, compared with a return for the average sector fund of 84.82 per cent. The fund has an ongoing charge figure (OCF) of 0.7 per cent.
Old Mutual Asia Pacific
The Old Mutual Asia Pacific fund was one of the best performers of the first quarter of the year and has a long history of strong first quarter performance.
The four FE Crown-rated fund – managed by Amadeo Alentorn, Ian Heslop and Mike Servent – delivered a 15.42 per cent return during the first quarter of 2017, compared with a 11.59 per cent gain for the average IA Asia Pacific ex Japan sector fund.
It was a good month for many emerging market equities funds, however, the Old Mutual fund has a considerable track record and has been a consecutive Q1 top quartile performer since 2012. This year’s first quarter performance was its best of the past 10 years.
Fund vs sector & benchmark in Q1 2017
Source: FE Analytics
When it has generated a top performance during the first quarter it has gone on to deliver top quartile performance for the year in 2016, 2014 and 2012. It was bottom quartile in 2015 and third quartile in 2013.
The £163.5m fund has returned 95.19 per cent over five years, compared with a return for the average sector fund of 55.64 per cent. The fund has an OCF of 1.0 per cent.
Stonehage Fleming European All Cap Equity
The £92.1m, five FE Crown-rated Stonehage Fleming European All Cap Equity fund has generated consecutive top quartile, first quarter performances since 2010.
The fund, managed by FE Alpha Manager Robrecht Wouters, aims to achieve a balance return of income and capital growth.
During the first quarter the fund rose by 8.32 per cent compared with a return of 7.14 per cent for the average IA Europe ex UK fund. Its best first quarter return came in 2013 when it returned 16.64 per cent.
Fund vs sector & benchmark in Q1 2017
Source: FE Analytics
After a strong showing in the first quarter of the year, the fund has gone on to deliver top quartile performance for the year in 2015, 2013, 2012, 2011 and 2010.
Last year it was second quartile with a return of 19.16 per cent and bottom quartile as recently as 2014.
Over five years, the fund has returned 103.72 per cent. The fund has an OCF of 1.87 per cent.
Threadneedle European Smaller Companies
The final fund is also managed by an FE Alpha Manager. Overseen by Mark Heslop, Threadneedle European Smaller Companies has also delivered consecutive top quartile returns during the first quarter since 2010.
The fund, which focuses on European small-caps, was up by 9.16 per cent during the first quarter of this year, compared with a 7.54 per cent gain for the average IA European Smaller Companies sector fund. Its best first quarter performance was recorded by the fund in 2012, when it rose by 14.89 per cent.
Fund vs sector & benchmark in Q1 2017
Source: FE Analytics
It has recorded top quartile annual performances in 2015, 2012 and 2010. The fund was second quartile in 2016 and 2013, bottom quartile in 2014 and 2011. It further delivered a top quartile performance in Q1 2008.
Over the past five years, the £1.7bn fund has returned 117.24 per cent, compared with a return for the average sector fund of 103.04 per cent. The fund has an OCF of 0.88 per cent.