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7 July 2017

Seven Elite Funds with returns over 20% in first half 2017

By Darius McDermott, managing director

India, Europe and Japan were among the best-performing regions in the first half of 2017. All three demonstrated political and economic momentum, and improving corporate conditions. We take a quick look at our seven best-performing Elite Funds so far this year, all of which returned more than 20% to the end of June.

1. Jupiter European Opportunities Trust - up 27.2%*

European markets have been strong in the first half of 2017 and this investment trust has been well positioned to capture the upside. Gearing of 17% has helped it to boost returns, and its quality growth investing style has been back in favour after a rough patch the year before. Some of the trust's performance can be attributed to a correction on oversold names within its portfolio in 2016, but Alexander Darwall is a highly skilled manager who has a real aptitude for recognising patterns of success in company business plans and management teams.

2. Scottish Mortgage Investment Trust - up 25.2%*

Scottish Mortgage Investment Trust is a globally diversified portfolio of around 70 stocks, with a preference for disruptive companies rather than established franchises. James and Tom may also hold some companies that are not listed on a public stock market if they see a strong growth opportunity.

3. T. Rowe Price European Smaller Companies - up 23.4%*

Also boosted by Europe's improving conditions, this fund offers a slightly different way to access the continent with its focus on smaller firms. Because there are fewer analysts looking for stock ideas in this part of the market, manager Ben Griffiths believes he has a better chance of uncovering unloved bargains that he can hold for the long-term. The fund also has around 30% invested in the UK, which makes it a particularly good option for those who are feeling positive on the UK outlook despite mid-term Brexit concerns.

4. Goldman Sachs India Equity Portfolio - up 23.2%*

Tax reform, state election victories from prime minister Modi's party and an opening up of infrastructure to foreign investment has renewed confidence in Indian equities this year. Although an eternally popular (and expensive) market, India faces its share of challenges and the business environment can be volatile. The team behind the Goldman Sachs India Equity Portfolio have the experience to navigate the pitfalls and their returns this year have exceeded the market.

5. Schroder Asian Alpha Plus - up 22.9%*

Manager Matthew Dobbs follows strict valuation guidelines to invest across the Asia Pacific ex Japan region and this fund's long-term track record is a testament to the effectiveness of his approach. He leans towards larger stocks and holds several of the key Asian technology giants in his top ten including Samsung Electronics, Alibaba and Tencent.

6. Baillie Gifford Shin Nippon - up 20.6%*

Japan has also been reasonably popular with investors this year, as higher global growth expectations are typically considered a good sign for the export-focused economy. This investment trust delves into Japan's smaller company sector, which can certainly be a volatile place in which to play. Over the long term, the trust has certainly proved very rewarding for patient investors, however, and the quality of the Baillie Gifford Japan research team is exceptional.

7. Old Mutual UK Smaller Companies - up 20.1%*

This fund beat the market significantly in the first half of this year thanks to its high conviction positions in a number of internet growth names, which have done very well in recent months. It's worth noting these stocks have now had a strong run, which may not continue apace. With a portfolio of around 80 smaller UK companies, the manager's ability to choose the right companies(or not) will always have a huge impact on returns.

Where to next?

*Source: FE Analytics, all funds TR in GBP, 01/01/2017-30/06/2017

Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. Darius's views are his own and do not constitute financial advice.

©2017 FundCalibre Ltd. All Rights Reserved. The information, data, analyses, and opinions contained herein (1) include the proprietary information of FundCalibre, (2) may not be copied or redistributed without prior permission, (3) do not constitute investment advice offered by FundCalibre, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a security, and (5) are not warranted to be correct, complete, or accurate. FundCalibre, shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use.