Which funds came out on top this year – MoneyWeek

Posted by

Itllbenosurprisetohearthatequityfundshavehadanawfulyear。

EveryoneoftheequitysectorstrackedbytheInvestmentManagementAssociation(IMA)isdownoverthepast12months。

TheUKsmallercompaniesandglobalemergingmarketssectors,down41。

6%and38。

9%respectively,weretheworstperformers,followedcloselybyEuropeansmallercompaniesandAsiaPacificexcludingJapan。

Infact,of30fundsectorsintheIMA,onlyfourareup,withglobalbondsandUKgiltsthepickofthebest。

Theyverisen15。

6%and13%eachthisyear,asinterestrateshavefallenandinvestorssoughtrefugeintheperceivedsavehavenofsovereigndebt。

Buttherestofthefundspictureismessy–retailinvestorshavepulledanet£500mfromequityfundssofarthisyear。

Thatrepresentsa30%dropinfundsundermanagement,accordingtotheIMA。

Herearesomeof2008shighlights。

Commercialproperty

Wehavebeenbearishforovertwoyearsandseelittlereasontochangetack。

Commercialpropertyfundvalueshavefallen32。

2%fromtheirJune2007peak,accordingtoadvisoryfirmCBRichardEllis。

However,theRoyalInstitutionofCharteredSurveyorsisforecastinga50%dropinpropertyvaluesfromtroughtopeak。

Meanwhile,thesharepricesofLondon-listedpropertycompanieshavealreadyfallenonaverageby44%justthisyear。

Thatsuggeststhatcommercialpropertyfundsmayhavealotfurthertofallyet。

ThelargeMGPropertyFundillustratestodayswoes。

Itsdown24。

6%overoneyear,accordingtoMorningstar。

Andlastmonthitwasforcedtoputa90-monthnoticeperiodonredemptions。

Inotherwords,ifyouwantedtosellyourinvestmentinthefund,youhadtowaitthreemonthsforyourstaketobevaluedandthecashreleased。

AndwiththefundsittingonlotsofprimeLondonofficespace,pricesarelikelytofallfurtherasrents(down13。

1%thisyear)andvaluesdrop。

Investorscashingoutwillbehitharderthantheone-yearperformancefiguresuggests。

ThentherearethetroublesatAvivaandNewStarAssetManagement。

TheywererespectivelyforcedtoclosetheirEuro-peanPropertyFundandInternationalPropertyFundasinvestorspulled£117mfromthecommercialpropertysectorlastmonth。

Willweseemoreclosures?

Idontknow,saidRichardJones,managingdirectorofUKpropertyatAvivaintheFT。

Butitsfairtosayalotofthecashthatfundmanagerssetasidetomeetnewredemptionshasgone。

Sothesectorremainsasell。

Emergingmarketsandcommodities

Wheninvestorsstartedtorushtothesafehavensandoutofanythingremotelyrisky,emergingmarketswerehithard,NigelRandall,senioremerging-marketsstrategistatRBCCapitalMarketstoldtheFT。

Aslong-termbullsonthegrowthpotentialofmanydevelopingpartsoftheworld,westillbelievethereisacaseforinvestingthere。

ButtimingiseverythingandrightnoweveryindicatorpointstowardsfurtherfallsinAsia,saysFerasAl-ChalabiofCFOdeyAssetManagement。

ThenumberofairmilestravelledinChinahasturnednegativewhileelectricitydemandhasalsoturnednegativeforthefirsttime。

Assuch,thedramaticslowdowninAsiahasbeenunderestimated。

Sowellbestayingclearfornow。

However,keepaneyeintheNewYearonAberdeenEmergingMarkets。

Sure,itsdown27%fortheyear。

Butthatsagainsta44%dropfortheMSCIEmergingMarketsIndex,whichputsitaheadofbothemerginganddevelopedmarketsthisyear。

Thefundalsoboastsoneofthemostexperiencedmanagementteamsinthearea。

Inthemeantime,abigdropinglobaldemandforrawmaterials,particularlyfromChina,meansthatcommodityfundswillcontinuetosufferfornow。

TheReuters-JefferiesCRBindex,aglobalcommoditiesbenchmark,isdown33。

6%thisyear。

Sowherewerethewinnersin2008?

Downjust8。

09%fortheyear,JapanhasbeenbyfarthebestequitymarketintheIMAuniversethisyear。

NeptunesJapanOpportunitiesfundstandsout。

Itsup81。

5%,althoughthatslargelybecausethefundmanager,ChrisTaylor,bearishlysoldshorttheTopixthisyear。

Andinyenterms,saysMeeraPatelatHargreavesLansdown,thefundisonlyup10%,withhislongtermtrackrecordabitpatchy。

Sotobenefitfromanyfurtherstrengtheningintheyen,wefavouranindexfundsuchastheiShareMSCIJapanindex(LNIJPN)。

Andthebestbetsthisyear,andprobablynexttoo?

Giltsandbonds。

AsDariusMcDermottofChelseaFinancialServicestellsTheTimes:Fallinginterestratesandfallinginflationwillbegoodforbondsandarelikelytosendpriceshigher。

Investorscouldbenefitfrombothdecentincomeandariseinthecapitalvalueoftheirinvestments。

HetipsMGOptimalIncome,yielding6。

5%,andtheHendersonStrategicBondfund,yielding7。

5%。

NakedTextNakedText