Will 2018 be an uphill battle for global equities?
Money Management looked at data from FE Analytics to see which funds in the top quartile over five years sat in the bottom quartile for 2018.
Macquarie’s IFP Global Franchise fund was the worst performing fund this year, jumping from annualised returns of 14.14 per cent over five years to -0.38 per cent in 2018.
Of the top quartile long-term funds, Legg Mason’s Martin Currie Real Income fund was the second-worst performing fund in the short term, dropping from 13.89 per cent over five years to 2.61 per cent this year. It was the sole ACS Equity - Australia fund, and one of three Australian equity sectors, to take a dive.
Other Australian equity funds to drop were small/mid cap Forager Wholesale Value and Microequities Deep Value, dropping from 14.87 per cent to 5.59 per cent and 16.96 per cent to 7.04 per cent respectively.
Fiducian’s India fund took the biggest fall, dropping from returns of 21.41 per cent over five years to 3.18 per cent in 2018.
Looking at the list, over half of falling funds call the ACS Equity - Global sector home, which could mean the sector is perhaps in for an uphill battle this year.
Global equity funds Forager International Shares, BT Wholesale Partner International Shares, MFS Global Equity Trust, MFS Concentrated Global Equity Trust and Bell Global Equities joined Legg Mason in the quartile drop.
The chart below shows the performance of the global equity funds relative to the sector over five years.
Despite these funds dropping the ball, it could be an isolated case, and even though the sector average has fallen over the course of the year, investors might rest easy knowing the global equities sector is still in the top quartile over the short term.
This could mean, though, that every sector is experiencing a downfall in 2018, and its top quartile status is relative.
Over a one-year period, the sector average was 11.80 per cent, while six months saw the sector return 4 per cent, three months saw returns of 3.16 per cent and the month to date 0.20 per cent.
The table below shows the funds that placed in the top quartile over five years and the bottom quartile over the year to last month’s end.
AUTHOR
Anastasia Santoreneos
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