Revealed: the top performing funds in the world – and the real dogs
IT'S about a year since the Greeks were withdrawing about €800m a day from their banks amid fears that the country could be forced out of the euro.
Funds which invested in Greek shares were probably the last thing you would have put your money into at the time – yet, if you did, you could have almost doubled your money.
On the other hand, if you put your money into commodity funds this time last year, you could be staring at losses of almost 70 per cent.
The Sunday Independent teamed up with the international stock market analyst Morningstar and some Irish stockbrokers to track down some of the best – and worst – performing investment funds over the last year.
The best performers were largely those which invested in Asian and Greek equities. Among the worst performers were funds which invested in commodities, such as gold, silver and precious metals.
CC Japan Alpha EUR
Up 74 per cent
This fund, which invests in Japanese equities and is managed by the Asian fund manager Coupland Cardiff Asset Management, was one of the best performing funds over the last year, climbing 73.67 per cent.
"The most striking feature of equity market performance this year has been the gains in Japanese equities, with the Nikkei up more than 30 per cent," said Brian O'Reilly, director of investment strategy with Davy. "The driving force behind this rally has been the dramatic change in economic policy by Prime Minister, Shinzo Abe, who has committed to do everything in his power to reflate the world's third largest economy. Japan still faces many problems, which include an ageing population and an exceptionally high debt burden.
"However, the momentum behind the current $70bn Bank of Japan quantitative easing policy is unprecedented for an economy of Japan's size. We see further weakness in the yen as a result which tends to be highly correlated with strong gains in the equity market."
Don't expect this fund to consistently make returns of more than 70 per cent every year. The return on the fund over the last three years has been about 13 per cent a year; the annual return over the last five years has been about 2 per cent.
Eurobank EFG Equity Flexi Style Greece Fund
Up 67 per cent
The Equity Flexi Style Greece Fund, which invests in Greek equities, made a return of 66.55 per cent over the last year. Another fund which invests in Greek equities, the Eurobank Institutional Domestic Equity Fund, jumped 62.15 per cent over the last year.
Last May, Greek shares were getting hammered by the Greek debt crisis – which was still very much at its height at that time. So any pick-up in Greek shares since then must be viewed in this context.
Pyn Elite A
Up 63 per cent
This fund, which is managed by the Finnish fund manager, Pyn, climbed 62.54 per cent over the last year. It invests in Asian equities.
Henderson Horizon Asia Pacific Property 12 EUR
Up 52 per cent
This fund, which largely invests in Asian property, made a 51.71 per cent return over the last year. Other Asian property funds have also done well over the last year, including Morgan Stanley's MS INVF Asian Property A fund, which jumped about 45 per cent, and Fidelity's Asia Pacific Property Fund A-Acc-EUR fund, which made a return of about 44 per cent.
"Global liquidity finds its way along the line of least resistance, and Asian capital markets (including equities, government bonds and property) have all benefited from the influx of capital in the past few years, with many Asian property funds benefiting disproportionately in the past year," said Rory Gillen, founder of Gillen Markets.
JPM Turkey Equity A EUR
Up 52 per cent
This fund, which invests in Turkish equities and is managed by JP Morgan, made a return of 52.38 per cent over the last year. The strong performance of this fund can be traced back to the Greek crisis, according to Gillen.
"It's not too surprising that Turkey has been a strong performer on a one-year basis given that it was adversely affected when the Greek crisis peaked near this time last year," said Gillen.
To ensure Greek funds didn't dominate the winners, we widened the scope of our analysis to include funds which performed well over the last year – even if they didn't beat the Greek funds.
Taking this approach, the others which emerged as winners include the Barclays Revolution A EUR Acc fund and the Dexia Equities L Europe Finance Sector l fund. Both of these funds are up 43 per cent over the last year.
Tech CF fund, which invests in biotechnology equities, made a return of about 39 per cent over the last year. Other winners were the First State Asian Property Securities Fund Class A EUR Inc, which jumped 38.79 per cent, followed by the Robeco New World Financial Equities D EUR fund, which was up 38.49 per cent.
Many of the funds which invested in commodities took a hammering last year so it's no surprise that these funds dominate the losers.
"In the last year, we have seen large price falls across many important commodities such as oil, copper and even gold," said Vincent Digby, founder of the financial adviser Impartial and a former head of funding with BoI Global Markets. "China being one of the major commodity users undoubtedly impacted on commodity prices as economic growth in China has slowed."
Gold miners were the worst performing equity sector in the past year, according to Gillen.
"Better performances from global stock markets, a firmer dollar and a lack of any tangible signs of inflation led to a gradually declining gold price reflecting on-going profit taking after an 11-year bull market," he said.
"Gold miners, which in any event had been struggling to contain mining costs and which had been reporting disappointing profits, have been out of favour for some time and share prices in this sub-sector of the global equity market cascaded downwards in a frenzy of selling in April."
So which funds were amongst the biggest losers over the last year?
FS Gold & Silver Reserve Fund
Down 68 per cent
This fund, which invests in gold and silver securities, is managed by IFM Independent Fund Management.
FS Rare Earth & Strategic Metals Fund
Down 59 per cent
This fund, which is managed by Crystal, invests in the equities of companies involved in "rare and strategically important" metals.
Stabilitas Growth Small Cap P
Down 50 per cent
This fund, which is managed by IP Concept, invests in gold equities and other resources, such as water, oil and precious metals.
Genus Dynamic Gold E
Down 49 per cent
This fund, which is managed by Baker Steel, largely invests in the equities of gold and precious metal companies.
Stabilitas Pacific Gold+Metals P fund
Down 46 per cent
This fund, which is managed by IP Concept, fell by 45.99 per cent over the last year. Another IP Concept fund, Stabilitas Gold+Resourcen P, was also hit badly by the downturn in commodities, falling by 45 per cent.
Other losers over the last year include Universal Investment's Earth Exploration Fund UI EUR R, which invests in mining, oil and gas producers and explorers.
This fund slipped by about 44 per cent. The Dynamic Precious Metals Fund A, which invests in Canadian precious metals, also fell by 43 per cent over the last year.
The Franklin Gold and Precious Metals A Acc EUR fund, which invests in gold and precious metals, lost more than a third of its value over the last year. The Blackrock Global Funds World Gold A2, which largely invests in gold-mining equities, fell by 30 per cent.
The investment returns or losses outlined in this article were valid for the year running to early May 2013 and are based on information supplied by Morningstar and Irish stock brokers.
Remember, past performance is no guarantee of future returns – and the returns or losses made on the funds mentioned in this article in the future could be a fraction (if any) of those made over the last year.
When deciding which funds to put your money into, don't pick investments based solely on last year's performance, warned Digby.
"The only thing that matters is future performance," he said. "If global growth picks up, for example, commodity investments might be next year's top performers."