The strong volatility and economic harm caused by the coronavirus pandemic this year has hit the performance of most fund categories.
There are 183 fund categories in the Hong Kong and Singapore universes combined, according to FE Fundinfo classification. Year-to-date, only 7% of the categories have positive returns in US dollar terms, measured by the average performance of constituent funds.
Looking specifically at the Singapore retail mutual universe, which has 65 categories, only four are positive.
Top and bottom four fund categories, year-to-date
The top category is gold and precious metals, which has only 7 funds. The best of this group is the BlackRock GF World Gold, which returned 19.37% year-to-date, FE Fundinfo shows.
Co-managed by Evy Hambro and Tom Holl, the fund gets a four-star (historical) rating from Morningstar and a forward-looking analyst rating of silver.
The fund holds no physical gold.
A driver of performance has been the largest holding representing 10% of the whole portfolio – Barrick Gold. It is up 50% year-to-date.
Ned Naylor-Leyland, manager of the Merian Gold and Silver Fund, recently argued that gold miners have been ignored for decades but now their margins are set to increase, driven by by falling oil prices and low local currency labour costs. “[G]old miners are now in the eye of a perfect storm,” he said.
The worst performing category is Latin America equity (-46%) which has 11 funds. At the bottom was the HSBC GIF Brazil Equity Fund (-55.13%).
The top holding (9.5%) is Brazil’s Banco Bradesco, which is down 50% year-to-date. In fact financials and basic materials sectors account for half the portfolio.
During the same period the fund’s benchmark, the MSCI Brazil 10/40, was down -49.6%.
In a general sense, the eight fund categories listed above had similar results above and below zero over the long term. Looking at three-year cumulative returns, the top four remained positive and the bottom four negative (the same holds true for a five-year period).
Three-year returns
