Home Estate Planning China bounces back in February and dominates best performing funds

China bounces back in February and dominates best performing funds

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The best performing funds throughout February were dominated by Chinese funds, while property and physical metal funds both lost out as the worst performers.

Throughout last month, the best performing fund was Matthews China Small Companies, which returned 14.4 per cent, according to data from FE Fundinfo.

Indeed, seven of the top 10 performing funds last month were China-focused, with the only exceptions being US-focused funds such as the Nikko ARK Disruptive Innovation fund, which grew 12.1 per cent throughout the month.

China also took the sector top spot, with the entire sector growing nine per cent throughout the month. This was followed by tech funds, which grew five per cent on average, then global emerging markets, which grew 4.8 per cent.

Ben Yearsley, director of Fairview Investing, said: “China was the surprise package last month with the Hang Seng gaining over 6 per cent on more targeted stimulus measures.”

However, he noted that the sector had fallen more than nine per cent in January, meaning the country was still down for 2024. Chinese equities still remain at 20 year lows against the broader market.

Among investment trusts, the SDCL Energy Efficiency Income Trust topped the tables, returning 19.4 per cent throughout February, followed by the Alpha Real Trust (17.6 per cent) and Weiss Korea Opportunity (13.9 per cent).

Meanwhile, the Aviva European Property fund took the bottom spot for the month, losing 12 per cent of its value.

The worst performing funds of the month were split, with three being property funds and seven being precious or strategic metal funds, such as the Baker Steel Gold & Precious Metals fund that lost 11.4 per cent throughout the month.

Property funds took a serious hit this month following the news that Legal & General would be overhauling its fund to include indirect property holdings due to fears around liquidity.

“The writing for physical property funds has been on the wall for many years and with the Financial Conduct Authority too timid to make any kind of judgement on the sector, it’s been left to fund managers to kill the sector,” added Yearsley.

Meanwhile, the director explained the poor performance from the metal funds as the prices of many metals were “in the doldrums”, such as lithium’s 72 per cent fall in the last year.

Top funds in FebruaryReturn (per cent)Matthews China Small Companies+14.4Redwheel China Equity+13SVS Aubrey China+13Vontobel China A Shares Leaders+12.7GQG Partners US Equity+12.6Source: FE Analytics

Bottom funds in FebruaryReturn (per cent)Aviva European Property-12Baker Steel Gold & Precious Metals-11.4Charteris Gold & Precious Metals-10.5Ninety One Global Gold-9.8Sanlam Global Gold & Resources-8.6Source: FE Analytics

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