How funds have fared since the outbreak of coronavirus

by Tom Bailey from Money Observer |

With much of China’s economy in shutdown, companies across Asia have had to suspend operations, writes Tom Bailey.

Gripped by fears over the outbreak of coronavirus, China’s main indices, since they re-opened after Chinese New Year, have taken a beating. This has also been felt by open-ended funds. Of the 38 funds in the Investment Association universe that are focused on Chinese equities, only three are in positive territory since the start of 2020.

However, with China’s economy such an important component of the global economy, fears have spread to other markets, as can be seen by the table below showing the 10 worst performing funds since the start of the year.

Notably, the three worst performing open-end funds so far in 2020 have all been energy focused. Schroder Global Energy has lost 11.52% since the start of the year, Guinness Global Energy -10.59% and Meridian Global Energy -6.56%.

The price of a Brent crude barrel of oil has decreased by around 18% since the start of the year.

Funds in the Asia and emerging market sectors also took a hit. Of the 112 funds in the Investment Association’s Asia ex-Japan sector, just 18 were in the black. Similarly, just 26 of the 114 emerging market funds have produced a positive return for the year.

Other funds that have struggled include AB Asia Ex Japan Equity Portfolio (-6.01%) and Barclays Global Access Asia Pacific Ex-Japan (-5.6%). Waverton Asia Pacific (-5.19%), also part of the Asia Pacific ex-Japan sector, was also included in the 10 worst performers for the year so far.

Two emerging market funds were included in the worst 10: Artemis Global Emerging Markets, with a loss of 5.29%, and Barclays Global Access Emerging Market Equity, with a loss of 5.22%.

Many of these funds, alongside having direct holdings in Chinese equities, hold Asian companies that are part of supply chains which include Chinese factories. With much of China’s economy in shutdown, many of these firms risk having to also suspend operations. Most notably this has already happened to Hyundai plants in South Korea.

Fund IA Sector Performance from 01/01/20 - 04/02/20
Schroder Global Energy Global -11.52%
Guinness Global Energy Global -10.59%
Meridian Global Energy Global -6.56%
AB Asia Ex Japan Equity Portfolio Asia Pacific ex-Japan -6.01%
Barclays Global Access Asia Pacific Ex-Japan Asia Pacific ex-Japan -5.60%
ASI China A Share China/Greater China -5.35%
New Capital China Equity China/Greater China -5.31%
Artemis Global Emerging Markets Global Emerging Markets -5.29%
Barclays Global Access Emerging Market Equity Global Emerging Markets -5.22%
Waverton Asia Pacific Asia Pacific ex-Japan -5.19%

This article was originally published in our sister magazine Money Observer. Click here to subscribe.

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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