What’s Hot? What’s Not? Inflation worries vs. Gold and Japan fears

Fri 02 Sep 2016

By Sam Lees

Access Level | public

What's Hot What's Not

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hot notIn August, index-linked funds made up all of the funds in the Hot table.  In the Not Hot camp, Gold and Japanese large and smaller company funds feature.

What’s Hot?

  • All of the funds in the Hot bucket are Index-linked gilts or bonds
  • These funds predominately hold bonds with long durations (some 20 years and upwards)...
  • ...so are all positioned for a scenario where interest rates stay “lower for even longer”
  • In contrast, in a rising rate environment these long duration bonds suffer and it's shorter-duration bonds that are generally a better option.
  • The "linked" element gives investors some protection from inflation, which may put in an appearance.

What’s Not?

  • Japan is again present in the Not Hot table…
  • …and is joined by Gold and Global Resources funds.
  • Gold has had a good run.  We said here that it may be running out of steam.
  • Meanwhile, in Asia there are worries that Japan’s central bank is running out of ideas to deal with its deflationary problems…
  • …and that has hit both large and smallcap funds.  

FURTHER READING

 

What's Hot?

Manager

Fund

Sector

August Perf. (%)

BlackRock

 Index Linked Gilt Tracker

IA UK Index - Linked Gilts

11.41

Insight

 UK Index Linked Bond

IA Unclassified

11.37

Henderson

 Index-Linked Bond

IA UK Index - Linked Gilts

11.33

Aberdeen

 Sterling Index-Linked Bond

IA Unclassified

11.24

Threadneedle

 UK Index Linked

IA UK Index - Linked Gilts

10.89

F&C

 UK Equity Linked Inflation

IA Specialist

10.87

Baillie Gifford

 Active Index-Linked Gilt Plus TR

IA UK Index - Linked Gilts

10.82

AXA

 Sterling Index Linked Bond

IA UK Index - Linked Gilts

10.73

Newton

 Index Linked Gilt

IA UK Index - Linked Gilts

10.50

Schroder

 All Mature Index Linked Bond

IA UK Index - Linked Gilts

10.47

 

 

What's Not?

Manager

Fund

Sector

August Perf.(%)

Investec

 Global Gold

IA Specialist

-16.00

BlackRock

 Gold & General

IA Specialist

-13.64

Smith & Williamson

 Global Gold & Resources

IA Specialist

-11.23

Legg Mason

 IF Japan Equity

IA Japan

-11.10

CF Ruffer

 Gold

IA Specialist

-9.89

Invesco Perpetual

 Japanese Smaller Cos

IA Japanese Smaller Cos

-9.40

JPM

 Japan

IA Japan

-7.34

Baillie Gifford

 Japanese Smaller Companies

IA Japanese Smaller Cos

-6.63

First State

 Global Resources

IA Global

-4.59

Fidelity

 Japan Smaller Companies

IA Japan

-4.34

Source: IA Universe, >£50m in size, UK domicile, 1/8/16-31/8/16

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What's Hot What's Not

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