It has been just over a decade since the global financial crisis of 2008 and while many funds were able to benefit from the recovery, some inevitably floundered. The best returning fund, Legg Mason’s Japan Equity, was a beneficiary of extraordinary monetary policies such as quantitative easing with the central of bank of Japan buying a huge amount of assets including equity ETFs. However, looking at data from a further decade previously, 2000-2010, the very same fund was the second worst performer.
The information comes from investment platform AJ Bell, with the company’s head of active portfolios Ryan Hughes stating: “The last decade feels like a transformative period for technology and it is therefore unsurprising that technology funds feature heavily in the best performers. Polar Cap Global Technology has led the way, helped by its high quality management team, and other technology funds have also made the top ten. With so much of the US market driven by technology, US equity funds also made the top ten with Baillie Gifford American clearly capitalising on its growth style.
“The other clear theme of the decade is UK smaller companies with Slater, Merian and Liontrust all showing their stock picking prowess over a long period.”
The funds that performed worst during the same period tended to be commodity plays. Mr Hughes added: “After being the top performer of the previous decade, commodities have certainly struggled over the last ten years with gold, oil and other commodity funds all taking a pounding. The MFM Junior Gold fund has been the biggest faller, losing nearly 75% of its value while their Junior Oils fund also lost nearly 70%.
“The reliance of commodities on the Brazilian market also meant that country specific funds made the list of shame with HSBC and Pictet both seeing their Brazil funds at the bottom of the charts.”
With many believing that the use of monetary policy to stimulate markets must surely be nearing an end, the next ten years should be an interesting decade to see which funds come out on top. Is there going to be return to commodity fund outperformance of will equities maintain their dominance as top asset class?
Source: FE. 17/12/2009 – 17/12/2019
