February’s top and bottom performing funds

Rob Morgan rounds up the notable fund sector trends in February as share markets continued their strong start to the year.

This content is more than 6 months old now, please visit the news area of this site for more recent content

  1. Rob Morgan

Share markets continued their largely strong start to 2019 in February. Optimism over trade talks between the US and China set a positive tone, and with the US Federal Reserve having dialled back its expectations for interest rate rises at the start of the year the macro-economic picture continued to brighten.

Although the situation remains complex, hopes have been building that an agreement can be reached between the US and China after a series of high-level talks. President Trump said the US and China are "very, very close" to signing a trade agreement, potentially ending the long-running feud. The US administration’s decision to delay tariff increases on $200bn worth of Chinese goods, which were due to take effect on 1 March, also boosted hopes that the two sides were moving towards a resolution.

This optimism has driven a significant rebound in Chinese shares, although there are still concerns about the level of bad debt in its economy and whether growth targets can be met this year. Even if there is some form of short-term resolution to the trade dispute, the White House continues to believe that China's efforts to get hold of US technology are “an existential threat” to its future, so tensions are likely to continue.

Funds investing in US smaller companies were among the leading investments over the month, with technology and Chinese specialist funds also enjoying a healthy return. Elsewhere in emerging markets, though, pre-election nerves and tensions with Pakistan overshadowed India equities, while Latin American and Eastern European markets were also under pressure.

Bearishly positioned absolute return funds also suffered as most markets made gains. Jupiter Absolute Return, one of the constituents of our Foundation Fundlist of preferred investments, was among the worst performers as its contrarian strategy was at odds with market sentiment. Manager, James Clunie, has been shorting more expensive US stocks (aiming to profit from a fall in price) while backing firms exposed to the UK domestic economy.

Brexit-related uncertainty is continuing to hold back the UK economy and was cited by the Bank of England as the main reason for revising down its 2019 GDP growth forecasts from 1.7% to 1.2%. However, sterling and domestically-orientated UK stocks registered gains as the odds of a more disruptive ‘no-deal’ Brexit were seen to narrow. The future shape of the UK’s relationship with the European Union is still unclear and talks could reach an impasse, as a number of sticking points remain, particularly the nature of the Irish border after Brexit. The lack of clarity remains a major issue for markets.

Although investors should be aware past performance is not a reliable indicator of future results, here are the top and bottom ten Investment Association (IA) funds and sectors for February 2019 in full:

Top 10 funds:

Bottom 10 funds:

Top 10 sectors:

Bottom 10 sectors:

Past performance is not a reliable indicator of future returns. Figures are shown on a % total return basis, bid to bid price with net income reinvested; Source: FE Analytics, data for February 2019: 31/01/2019 to 28/02/2019. Onshore and retail open-ended funds only.

This website is not personal advice based on your circumstances. No news or research item is a personal recommendation to deal. Investment decisions in collectives should only be made after reading the Key Investor Information Document or Key Information Document, Supplementary Information Document and/or Prospectus. If you are unsure of the suitability of your investment please seek professional advice.

More from author

  1. Rob Morgan

    End of tax year planning: investing for children with a Junior ISA

    Fund Research - 1st Mar 2019 11:06am

    Rob Morgan outlines the basic considerations when investing for the children in your ...

  2. Rob Morgan

    End of tax year planning: the power of pensions

    Fund Research - 1st Mar 2019 11:06am

    Unlike ISAs, income tax relief is available on your pension contributions. This can b...

  3. Rob Morgan

    Bed & ISA: shelter existing shares from tax

    Fund Research - 1st Mar 2019 11:06am

    A Bed & ISA is a neat way of helping you to use your ISA allowance while making your ...

Most read articles

  1. February’s top and bottom performing funds

    Three fund ideas for using your ISA allowance

    Fund Research - 1st Mar 2019 11:06am

    If you are looking for inspiration for your ISA allowance here are three fund options...

  2. February’s top and bottom performing funds

    The top performing funds since the depths of the global financial crisis

    Fund Research - 1st Mar 2019 11:06am

    Shares have recovered strongly since the market trough a decade ago. Rob Morgan looks...

  3. February’s top and bottom performing funds

    February’s top and bottom performing funds

    Fund Research - 1st Mar 2019 11:06am

    Rob Morgan rounds up the notable fund sector trends in February as share markets cont...

Investment involves risk. You may get back less than invested.