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What’s Hot? What’s Not? US dives lower while Europe and Asia climb

Posted by: Sam Lees

 

The What’s Hot? What’s Not? tables show a mixed picture for the month of March.  A selection of sectors sit in the top table, which is mainly dominated by Europe and Asia.  The bottom table is focussed on the US, although at first glance the range of funds looks broad.

What’s Hot?

  • Targeted Absolute Return tops the table, although the obvious volatility in many Absolute Return funds merits investor caution.
  • One UK fund makes an appearance one of a number outperforming the main FTSE 100 index over the month. 
  • Europe and European Smaller Companies have continued to do well, with funds from both sectors making up 3 of the top 10 funds.
  • Asian funds are also positive with both general and country-specific (India) funds doing well.  
  • An Emerging Income fund makes up the rest of the top 10.  While more volatile, we encourage investors to look outside the UK for income, particularly at the opportunities in Asian and Emerging Markets.

What’s Not?

  • Absolute Return funds appear in the top and bottom tables, showing the diversity of strategies absolute return funds follow.  Although they tend to target positive returns over a period (usually 1, 3 or 5 years) consistent poor performance is disappointing.
  • The main story of the Not Hot table is the US.  All the other funds have large US exposures, so the dip in US markets and the US dollar is reflected in the make-up of the bottom table.
  • Biotech has see-sawed, falling into the bottom table after being in the top 10 last month…
  • …and 3 of the 10 funds are commodity and natural resource-focussed funds, all with large US exposures.
  • 4 funds are specifically US funds with both large and smaller companies appearing.  Investors who bought into the post-election rally in the US, particularly smaller companies, have done well from faith in Trump…
  • …but “buyer beware”: while the US could still go higher the rally may be stalling.
  • Finally, a global property securities fund (with over 50% in the US) makes up the rest of the poor performers this month.

FURTHER READING

 

What’s Hot?

Manager

Fund

Sector

Last Month Performance

City Financial

 Absolute Equity

 Targeted Absolute Return

6.40

MFM

 Slater Growth

 UK All Companies

5.75

Henderson

 European Smaller Companies

 European Smaller Companies

5.69

Jupiter

 India

 Specialist

5.52

JPM

 Asia

 Asia Pacific Excluding Japan

5.17

Baillie Gifford

 Pacific

 Asia Pacific Excluding Japan

5.05

JPM

 Europe Smaller Companies

 European Smaller Companies

5.01

Scottish Widows

 European Growth

 Europe Excluding UK

4.98

Baring

 Eastern Trust

 Asia Pacific Excluding Japan

4.77

Newton

 Emerging Income

 Global Emerging Markets

4.63

 

What’s Not?

Manager

Fund

Sector

Last Month Performance

GAM

 North American Growth

 North America

-5.07

Investec

 Enhanced Natural Resources

 Specialist

-4.05

Investec

 Global Energy

 Specialist

-3.95

First State

 Global Property Securities

 Property

-3.42

BlackRock

 Natural Res Growth & Inc

 Specialist

-3.39

The Boston Co.

 US Opportunities

 North America

-3.31

AXA-Framlington

 Biotech

 Specialist

-3.25

Argonaut

 Absolute Return

 Targeted Absolute Return

-3.24

UBS

 S&P 500 Index

 North America

-3.20

Artemis

 US Smaller Companies

 North American Smaller Cos

-3.15

 
 
 
Performance data: 1/3/17-29/3/17
Topic: Market commentary


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