Sector revival powers these funds to chart-topping returns
Saltydog Investor highlights the top funds of the past three months, revealing a common theme among the winners.
9th October 2023 15:28
by Douglas Chadwick from ii contributor
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Although only 35% of the funds that we monitor rose last month, and less than 12% went up in August, nearly half of them managed to make gains over the past three months.
In July, 94% of the funds made positive returns, and a fair number rose enough to be able to suffer two loss-making months and still end up on the right side of the line. The hardest thing for us as investors has been finding funds that have done consistently well.
Only 5% of the funds have risen in each of the past three months.
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We saw a similar trend in our overall sector analysis.
Although there are more than 50 Investment Association (IA) sectors, at Saltydog Investor we track only 35. There are a few sectors, like the Specialist sector, where the IA do not provide monthly data because “performance ranking of funds within the sector as a whole is inappropriate, given the diverse nature of its constituents”. There are also a lot of bond sectors where we track only a couple of funds and so we have put them all into our Global & Global Emerging Market Bonds sector.
In July, 33 out of the 35 sectors rose, with China/Greater China leading the way with a one-month return of 7.1%. Only the Healthcare and UK Index-Linked Gilts sectors went down. August was not so pretty, with only six sectors making gains. The best-performing sector was India/India Subcontinent, up just 0.9% over the month. China/Greater China, which had done so well the month before, went down by 7.0%. Last month was better, with 12 sectors making gains, but this was still significantly lower than June and July. Once again, the India/India Subcontinent sector took pole position with a 4.7% gain.
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Due to the volatility, only four sectors have risen in each of the past three months. They are the two Money Market sectors, India/Indian Subcontinent and our combined Global & Global Emerging Market Bonds sector. (Every quarter we provide our members with a detailed breakdown of each component of the Global & Global Emerging Market Bonds sector).
However, because most sectors did well in July, 15 sectors made gains in quarter three. That is not too bad, but the overall trend is not great. Quarter three was worse than quarter two, which was worse than quarter one. The last quarter of 2022 was the best quarter that we have seen for the past two years.
Here is a table showing the performance of the 35 sectors over the past three months.
Past performance is not a guide to future performance.
The clear winner is the India/Indian Subcontinent sector with a three-month return of 7.1%.
When you look at the leading funds over the past three months, you could be forgiven for expecting to see a fund from the India/Indian Subcontinent sector at the top of the table, but that is not the case.
As I mentioned earlier, the IA do not provide monthly performance data for all the sectors and one that they miss out is Commodities & Natural Resources. Our top-performing fund in quarter three is actually the TB Guinness Global Energy fund with a three-month return of 19.2%.
Next is the Schroder ISF Global Energy fund, up 18.4%. Although it is in the Global sector, because it can invest in companies all over the world, it could just as equally be in the Commodities & Natural Resources sector. Then it is the BGF World Energy fund. These are the three energy funds that I highlighted a few weeks ago.
Next is Jupiter India, which I wrote about at the end of August, followed by two Japanese funds that we mentioned in the last week of September.
Saltydog’s top 10 funds in Q3 2023
| Fund name | Investment Association sector | Monthly return 2023-07 GBP | Monthly return 2023-08 GBP | Monthly return 2023-09 GBP | Quarterly return 2023-Q3 GBP |
| TB Guinness Global Energy | Commodities and Natural Resources | 5.6 | 3.9 | 8.6 | 19.2 |
| Schroder ISF Global Energy | Global | 8.5 | 3.4 | 5.5 | 18.4 |
| BGF World Energy | Commodities and Natural Resources | 6.4 | 3.3 | 7.5 | 18.1 |
| Jupiter India | India/Indian Subcontinent | 4.4 | 1.7 | 6.1 | 12.7 |
| WS Morant Wright Nippon Yield | Japan | 4.5 | 0.6 | 4.7 | 10.1 |
| LF Morant Wright Japan | Japan | 4.1 | 0.3 | 5.4 | 10.1 |
| VT De Lisle America | North America | 7.0 | -0.8 | 3.1 | 9.4 |
| GS India Equity | India/Indian Subcontinent | 2.4 | 2.3 | 4.5 | 9.3 |
| JPM Natural Resources | Commodities and Natural Resources | 4.0 | -0.5 | 5.2 | 8.9 |
| BlackRock Natural Resources | Commodities and Natural Resources | 4.6 | -0.5 | 4.0 | 8.2 |
Data source: Morningstar. Past performance is not a guide to future performance.
Our two demonstration portfolios are still mainly invested in funds from the Money Markets sectors, but we do hold the Schroder ISF Global Energy and Jupiter India funds.
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