View more on these topics

Big sellers don’t bring big returns

The UK all companies and equity income sectors dominate Isa sales but rarely provide the best-performing funds in any given year.

The 10 top-performing funds over the past five years have been dominated by niche vehicles, including Russia, China, Japanese smaller companies and resources funds, according to Standard & Poor’s.

A scan of the performance tables on this page also shows how hard it is to pick next year’s winner. Japan funds topped the tables in 2003 and 2005 but these and Japanese smaller companies were the worst-performing sectors last year.

Legg Mason Japan equity, the fifth-best performer in 2005, with 69.91 per cent, ended up the worst performer last year, down by 50 per cent.

Mainstream UK equity funds have struggled to break into the top 10, although a number of smaller companies funds, such as Old Mutual UK select smaller companies and Standard Life UK smaller companies last year, have periodically made the performance hit parade.

Chelsea Financial Services managing director Darius McDermott says large caps have lagged small and mid-cap funds over the past five years and mainstream UK equity funds seldom beat more specialist funds in the short term.

He says: “Specialist funds, such as Japanese smaller companies or Russia, will have periods of strong growth that standard UK equity funds will struggle to beat.”

The strength of emerging markets, such as Russia and China, has also been a key component in driving the performance of natural resources, which have delivered strong returns in the past five years.

McDermott comments: “It is hard to pick next years’ winner. The trick is to have a balanced portfolio and accept that some parts will perform better than others in any given year.”

Recommended

Mobius says correction was expected

Templeton Asset Management chief executive Dr. Mark Mobius says the recent market correction should have been expected after four years with literally no interruptions.

NU move is delaying wrap cash

Norwich Union has admitted it has been holding back on IFAs’ commission payments for up to eight weeks due to admin problems with its Lifetime wrap proposition.Lifetime is moving its Cambridge operation to NU’s York office and some IFAs have been experiencing significant issues with service standards, transaction times and receipt of payment.NU director of […]

Schools of thought

Whatever investment theory you subscribe to, is the debate more than purely academic??

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com