ignites europe - named best and worst funds of 2015print issue

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Named: best and worst funds of 2015

By Ed Moisson 12 January 2016

Funds investing in smaller companies and Denmark have emerged as the best-performing vehicles of

2015, while those investing in Brazil and natural resources ranked among the worst performers.

The top-performing fund in Europe was a Chinese small cap managed by BNP Paribas Investment

Partners. The Flexifund Equity Small Caps China A returned 148 per cent despite the Chinese market

sell-off over the summer.

It was followed by three Danish small-cap funds managed by boutique Fundamental Invest and BIL

Nordic, part of Banque International à Luxembourg, while two other Danish equity funds ranked among

the top 10 performers, according to Morningstar data.

Alex Ko, head of the chief investment officer's office, Asia-Pacific at BNP Paribas Investment Partners,

says Chinese small caps were even more volatile than Chinese A shares last year, but these stocks rose in

both the early months of the year and in the fourth quarter.

Mr Ko says: “During periods of extreme volatility we were able to minimise drawdowns by diversifying

into more defensive sectors, before repositioning the portfolio more aggressively [ahead of] the

subsequent recovery.”

Swedbank Robur, which has been accused by consumer groups of closet tracking, ranked fifth in the

table. The Swedish asset manager’s Ny Teknik fund, which invests in smaller Nordic technology

companies, generated a return of 52 per cent compared with a 21 per cent rise for the Vinx Small Cap

index.

tes Europe - Named: best and worst funds of 2015Print Issue http://igniteseurope.com/pc/1269993/142593

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The highest-ranked UK-domiciled fund was Legg Mason IF Japan Equity, a medium and smaller

companies fund. Shiozumi Investments is the investment adviser for the fund and returned 49 per cent in

2015.

At the other end of the scale, the 10 worst-performing funds all lost more than 44 per cent last year.

Falling commodity prices in 2015 was the main reason for funds appearing at the bottom of the table,

with many of the worst performers investing in commodities and resources-related companies, or being

negatively affected by their exposure to Brazil, a major commodity exporter.

Seventy of the 100 poorest-performing funds invest in either natural resources or Brazil, includingbroader Latin American funds.

Several funds classified by Morningstar as having flexible allocation objectives also featured among the

10 worst performers.

Matrix Capital Management Trust’s Liechtenstein-domiciled FiveStar Focus Fund was the worst

performing in Europe, losing just under 60 per cent over the year and 45 per cent on an annualised basis

over three years.

Matrix Capital Management Trust did not respond to a request for comment at the time of going to press.

Tendercapital’s US Turnaround fund was another casualty of the commodities slump, with a loss of 46 per

cent.

Francesco Belloni, manager of the US Turnaround fund, which invests in companies that are “in or face

difficulties”, says: “We… are currently diversified on 55 turnaround stories with huge upside potential,

mainly in the energy, basic materials and shipping sectors.

“The top-down behaviour of commodities-sensitive sectors, together with the [fund’s] 100 per cent

currency hedge and 70 per cent average leverage, fully explains last year’s poor performance.”

Two other funds appear among the worst performers for structural reasons.

Mercer Flexible LDI £ Real Enhanced Matching 1 M-5 is one of a series of funds Mercer Investments

uses as part of its liability-matching solutions for pension funds.


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Niall O’Sullivan, deputy CIO at Mercer Investments, says the fund distributed 38 per cent of its capital

last year, which is “not reflected in the performance data shown”, explaining much of the fund’s fall.

Venture Global, a Spanish-domiciled fund, is in the process of being liquidated and has negligible assets

under management. Mirabaud, which manages the fund, says the “performance data [are] only a

consequence of this liquidation”.

Russia-domiciled funds are not included in this analysis, although several Russian funds grew by morethan 50 per cent last year.

The best-performing Russian fund was VTB Eurobonds, which grew by 65 per cent.

Vladimir Potapov, chief executive officer of VTB Capital Investment Management, says: “The Russian

Eurobonds market experienced a sharp recovery in 2015 supported by continued deleveraging of

companies’ balance sheets, rouble depreciation and central bank support.”


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