What's Hot? What's Not? East rising, West sinking

Fri 02 Jun 2017

By Sam Lees

Access Level | public

What's Hot What's Not

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hot notWhat’s Hot?

  • Developed Asia (Japan and Korea) make up 6/10 funds in the Hot table this month.
  • Two Japanese smaller companies funds (one of our Trades of the Decade) also feature.  
  • Korea is becoming more popular as recent scandals recede in the rear-view mirror.  Companies starting to pay more dividends to investors also raises confidence.
  • European growth has been reassuring investors despite rumbling Italian and Greek crises.  Three European funds make it into the table (and European smaller companies have been one of the best performers year-to-date).
  • Global Technology puts in an appearance as investors keep the faith with the FANGS (Facebook, Amazon, Netflix and Google).  Amazon’s share price recently went through the $1000 per share barrier up from $749 at the start of the year.  

What’s Not?

  • The UK has continued to sit under a Brexit cloud.  Uncertainty over the result of the upcoming General Election hasn’t helped.  Unsurprisingly, UK equity funds and index-linked gilts both sit in the bottom table.
  • US smaller companies have continued struggling as controversy continues to weigh on investors’ faith in Trump’s ability to gain support for his controversial agenda.  Investors don’t like inconsistency or uncertainty
  • Biotech and Natural Resources also feature.  Biotech has continued to suffer.  A large US exposure coupled with uncertainty over US healthcare reform haven’t helped…
  • …while Russia and energy funds wobble in line with the oil price.  OPEC (the oil cartel) failed to live up to investors’ hopes of deeper production cuts.  
  • Longer-term, increasing efficiency and rapid development of alternative energy sources and electric vehicles could mean the oil industry’s predictions of future oil demand may prove ambitious…
  • India makes up the last of the Not Hot table.  One of our Trades of the Decade, periods of weakness are a good opportunity to add to holdings.

FURTHER READING

 

Table 1: What’s Hot?

Manager

Fund

Sector

Last Month Performance

Legg Mason

 Japan Equity

 Japan

9.28

Baring

 Korea Trust

 Specialist

9.22

Fidelity

 Japan Smaller Companies

 Japan

8.55

CF Odey

 Continental European

 Flexible Investment

8.34

Baillie Gifford

 Pacific

 Asia Pacific Ex Japan

8.04

Baillie Gifford

 Japanese Smaller Companies

 Japanese Smaller Cos

7.74

AXA Framlington

 Global Technology

 Technology & Telecos

7.60

JPM

 Japan

 Japan

7.54

Schroder

 European Alpha Income

 Europe Ex UK

7.35

Fidelity

 European

 Europe Ex UK

7.21

 

Table 2: What’s Not?

Manager

Fund

Sector

Last Month 
Performance

AXA Framlington

 Biotech

 Specialist

-4.53

Neptune

 UK Mid Cap

 UK All Companies

-3.64

Thesis TM Sanditon

 UK Select

 Targeted Absolute Return

-3.07

Legg Mason IF Royce

 US Smaller Companies

 North Am Smaller Cos

-2.64

Neptune

 Russia & Greater Russia

 Specialist

-2.38

Investec

 Global Energy

 Specialist

-2.22

Vanguard

 UK Inflation Linked Gilt Index

 UK Index Linked Gilts

-1.86

AXA

 Sterling Index Linked Bond

 UK Index Linked Gilts

-1.69

Jupiter

 India

 Specialist

-1.47

Investec

 Enhanced Natural Resources

 Specialist

-1.21

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What's Hot What's Not

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