Beleaguered Asian equity investors are finally enjoying some respite as 2014 has witnessed the sector claw back some of its recent losses.
Following a volatile 2013 which saw the average IMA Asia Pacific ex Japan portfolio gained less than 2 per cent and the average emerging market fund lost money, year-to-date six out of 10 top performing funds are investing in developing nations, according to fund broker Hargreaves Lansdown.
IMA Asia Pacific ex-Japan was the best performing sector in the period, where the average fund has delivered 8 per cent.
Among the top performers was the HSBC GIF Indian Equity fund, which was up 32 per cent while the JP Morgan Turkey Equity and First State Indian Subcontinent portfolios achieved respective returns of 30 and 26 per cent.
However, on the back of a bounce in the price of bullion, topping the charts was the WAY Charteris Gold portfolio, which achieved 33 per cent growth. Blackrock’s Gold & General fund also had a better year with a 24 per cent return while Junior Gold returned 28 per cent.
Performance among emerging markets varied markedly. While Asian stocks did well - China is up 6 per cent and the Indian market is up 21 per cent driven by optimism surrounding the election of Narendra Modi, emerging European shares lost some 7 per cent.
For their part, Russian equities collapsed by 16 per cent as geopolitical tensions in the region took their toll.
Commenting on the statistics Laith Khalaf, senior analyst at Hargreaves Lansdown said: “Looking at emerging markets in aggregate masks an assortment of fortunes within individual markets, and some funds have struggled, particularly those with heavy exposure to Russia.
“This illustrates the fact that country-specific funds are for brave investors only, and those without nerves of steel should consider investing in more general emerging markets funds, where a fund manager can run a diversified portfolio and dictate which markets to invest in, and when.”
