Indian equity and energy-focused funds achieved a u-turn in their 2021 performance compared to the previous year, according to research from Fairview Investing and data from FE fundinfo, with the four worst funds of 2020 all featuring in 2021’s list of the top six best performers.
Soaring energy prices due to supply chain cuts means that six of the ten best performing funds in 2021 were energy-focused mandates.
The $433m Schroder ISF Global Energy SICAV took first place in the Investment Association universe with a total return of 48.8%, while the £32.4m TB Guinness Global Energy sterling – a unit trust launched in 2008 – followed closely with gains. by 45.7%.
Sister fund Guinness Global Energy, a $256m ICVC domiciled in Ireland and run by the same managers, came in fourth place with a total return of 45.5%, although it was the worst performer in 2020.
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GS North American Energy & Energy Infrastructure Equity, BlackRock GF World Energy and Pimco GIS MLP & Energy Infrastructure ranked fifth, sixth and eighth, respectively, with total returns of 44.3%, 43.9% and 43.4%.
Indian equity funds also fared well in 2021, with 20% of the top ten list populated by such mandates, despite being the emerging market laggards of 2020.
Ben Yearsley, Managing Director of Fairview Investing, said: “Away from energy, India was probably last year’s surprise package. When you think back to India’s spring Covid rate spike, it would have been a brave person to have made India one of the go-to stock exchanges.
“However, a successful vaccination program and political stability have allowed the long-term growth story to reassert itself.”
He added that it is “good to see an Indian fund with sustainability at the core performing exceptionally well”, with manager Mike Sell’s $33.4m Luxembourg-domiciled Alquity Indian Subcontinent achieving the seventh best total return of 2021 at 43.6%.
The other Indian equity fund to perform in the top ten was Nomura India Equity, a $282m mandate domiciled in Ireland and managed by Vipul Mehta, with a total return of 45.6%.
Conversely, the ten worst performers of 2021 included a mix of Chinese, Latin American and frontier market equity funds.
“The bottom of the fund universe was mixed,” Yearsley said. “China funds were unsurprisingly near the foot after investors took fright at renewed regulatory crackdowns – however, who hadn’t factored political risk into a China thesis?
“Latin America and Brazil were also at the bottom of the table because of more political shenanigans.”
Robert Mumford’s GAM Star China Equity and Hyomi Jie’s Fidelity China Consumer found themselves in fourth and tenth place respectively for the worst performance, having lost 26% and 24.1% throughout the course of 2021. Elsewhere, HSBC GIF Brazil Equity came in third place with a loss of 28.1%, while HSBC MSCI Turkey and JPM Brazil Equity fell by a respective 25.6% and 25.2%.
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The second worst performing fund, according to Yearsley’s research, was the £164.2m LF Equity Income fund – previously Woodford Equity Income – which fell 34.4%.
The £3.4m Garraway Absolute Equity fund lost the most money, however, having fallen 34.7%.
Yearsley added: “This fund has got to be among the most volatile because it’s often at the top or bottom of the AI universe.”
