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Which funds were most volatile in 2017?

In a year of extremely low volatility, gold and precious metals funds stand out as the most volatile, FE data shows.
Which funds were most volatile in 2017?

Market volatility was at unprecedented lows in 2017. The Cboe Volatility Index (VIX) reached its record low daily closing of 9.14 on 3 November, beating its prior record low from January 2007, data from Cboe show (the average closing value of VIX since 2004 has been 18.5, its highest closing was 80.86 on 20 November 2008).

Although many forecasts for 2018 predict essentially more of the same – the synchronised global market recovery will continue at its moderate pace – they also caution about rising volatility. Even if substantial market shocks, whether from geopolitical events or a sudden rise of inflation, are not very likely, a reversal of multi-year central bank monetary policies  and rising interest rates are likely to depress bond prices and cause some jitters.

Ten years of market volatility

But even in the benign environment of low volatility in 2017, some sectors stood out as providing at least a modicum of excitement, if not always rewarded with good returns.

Gold and precious metals funds, in particular, top FSA‘s list of most volatile mutual funds in 2017, available to investors in Singapore and/or Hong Kong, according to data from FE.

Certain emerging markets also were more volatile than others, in particular Latin America, Korea, India and emerging Europe.

Five most volatile fund categories


Sector Volatility 1-year return
Gold & Precious Metals Equity 24.32 9.39%
Latin America Equity 16.48 24.19%
Korea Equity 13.33 35.68%
Emerging Europe Equity 12.50 18.30%
India Equity 10.97 40.15%
Data: FE, 31 December 2017, returns in US dollars, funds registered for sale in Singapore


Jittery funds

FSA searched FE data for individual mutual funds with the highest volatility in 2017. Eight out of the top ten most volatile funds in Singapore − and nine out of top ten in Hong Kong − were commodity funds, in particular gold and precious metals. Many of the funds delivered weak returns or even losses in 2017, while other sectors, for example Asia Pacific ex-Japan equity, had average returns well into double digits.

Because gold and commodities as a category had lower performance than many other categories in a strong 2017, is it time to buy them in 2018?

Saxo Bank in its latest outlook, sees the price of oil returning to $60 per barrel in 2018. But the bank is more optimistic about gold.

“Our bullish sentiment derives from the belief that inflation will receive increased attention as it moves higher, while geopolitical risks remain elevated with the market disliking the uncertainty created by the unpredictability of the US president.

“Investors are likely to continue to seek tail-end protection against the increased risk of a correction in other asset classes,
particularly stocks and bonds but potentially also crypto-currencies.”


Most volatile in Singapore

Fund FE Category Volatility 1-year return
Fidelity Fast Europe  Equity: Europe inc UK 34.31 17.44%
Market Vectors Junior Gold Miners  Equity: Gold & Precious Metals 28.73 −3.25%
Falcon Gold Equity Ucits  Equity: Gold & Precious Metals 28.15 −5.77%
LLB Craton Capital Global Resources  Equity: Commodity 28.15 15.98%
Investec Global Gold  Equity: Gold & Precious Metals 27.62 2.53%
LO World Gold Expertise  Equity: Gold & Precious Metals 27.16 13.68%
Deutsche Noor Precious Metals Securities  Equity: Gold & Precious Metals 27.00 2.19%
Schroder ISF Global Gold  Equity: Gold & Precious Metals 26.60 2.31%
LLB Craton Capital Precious Metal  Equity: Gold & Precious Metals 26.20 −7.74%
Twelve Falcon Insurance Opportunities Fixed Income: Global High Yield 26.20 4.58%
Data: FE. One year to 31 December 2017, return in US dollars


 Most volatile in Hong Kong

Fund FE Category Volatility 1-year return
Schroder ISF Global Gold  Equity: Commodity 26.60 2.31%
Samsung S&P GSCI Crude Oil ER Futures ETF  Equity: Commodity 26.03 0.11%
Invesco Gold & Precious Metals  Equity: Commodity 25.96 −8.03%
Franklin Gold and Precious Metals  Equity: Commodity 25.61 −9.09%
Blackrock GF World Gold  Equity: Commodity 24.91 −1.78%
Investec Global Gold  Equity: Commodity 24.48 3.92%
XIE Shares FTSE Gold Miners ETF  Equity: Commodity 23.40 2.06%
CSOP WTI Oil Annual Roll December Futures  Physical Commodity 23.12 −0.51%
Amundi CPI Global Gold Mines  Equity: Commodity 22.67 −2.53%
CSOP China Southern Selected Value Mixed Securities Investment Mixed Assets: Asia Pacific 22.27 4.05%
Data: FE. One year to 31 December 2017, return in US dollars, leveraged ETFs have been excluded.


Part of the Mark Allen Group.