10 Best and Worst Performing Funds in May

Funds exposed to China and US tech were the worst performers in May, while bond, gold and India funds outperformed

James Gard 5 June, 2019 | 10:48AM

Indian election resultsMay was a bruising month for global stock markets after a decent start to the year, with China equities bearing the brunt of renewed trade tensions between Washington and Beijing.

2019 had seen many global benchmarks recover their poise after the heavy sell-off in the fourth quarter of 2018. But May saw renewed volatility after the US imposed new tariffs on China, which in turn retaliated with increased levies on American imports. Threats by US President Donald Trump to impose tariffs on Mexico at the end of the month also rattled world investors.

With China’s Shanghai Composite Index dropping more than 10% in recent weeks, it is no surprise to see China-focused funds at the bottom of May’s performance tables. According to Morningstar data to the end of May, BlackRock’s China Fund was the worst performing among funds rated by Morningstar. The fund, which is rated four stars and has a Neutral Rating, fell 10.92% month on month.

In terms of the month's winners, India's elections, which helped push equity indices to record highs, had a positive knock-on effect on funds. Meanwhile, the flight to safe assets such as bonds put fixed income funds at the top of the leaderboard. Gold-focused funds also did well as the precious metal gained in the stock market volatility.

Neutral-rated BGF China was the worst performer, losing nearly 11% in May, while Bronze-rated Comgest Growth China wasn't too far behind. Funds by JPMorgan, Janus Henderson, GAM, and Schroders were also among the month’s biggest fallers.

Many of these funds were among the best performing in the first quarter of this year after a spectacular rebound for emerging markets. Bronze-rated Janus Henderson China Opportunities was the best performing open-ended fund in the first three months of the year, rising 16.5%.  The fund fell 8.68% in May, but is more than 10% up for the year to date.

Managed by Charles Awdry and May Wee, the £1.27 billion offering is high conviction, with just 31 stocks, and has top three holdings in Tencent, Alibaba and AIA. It’s a “solid offering for investors looking for an actively managed China equity fund”, says analyst Simon Dorricott.

With US markets also falling heavily, funds exposed to tech firms and US smaller companies also fared badly. The Neutral-rated T.Rowe Price Global Technology Equity Fund lost nearly 8% in May. The fund has $315 million of assets under management and counts Facebook (FB) as its top holding with 8.7% of the portfolio.

Among UK-focused funds, Woodford Equity Income was 9.57% lower in May. The fund suspended trading on June 3.

Bond funds are heavily featured among May’s winners after the equity market rout, as well as Indian equity funds, which rallied after Narendra Modi was re-elected with a landslide win.

Bronze-rated JPM India just pipped Neutral-rated iShares Index Linked Gilt to the top spot in May. Other fixed-income funds from L&G, Royal London and Vanguard also featured in the top 10. 

Silver-rated BlackRock Gold and General was just outside the top 10 in May, with a gain of just above 5%. The fund is up 3.72% in the year to date but lost 11% in 2018.

 

Top 10 Fallers in May 
BGF China D2 USD -10.92
Comgest Growth China EUR I Acc -10.73
LF Woodford Equity Income Z Sterling Acc -9.57
GAM Star China Equity A USD Acc -8.91
JPM China C (acc) USD -8.79
Janus Henderson China Opps A Acc -8.68
JPM Greater China C (acc) USD -8.53
Legg Mason RY US SmCp Opp X GBP Acc -8.37
Schroder ISF China Opps C Acc USD -8.30
Aviva Investors UK Lstd Eq Uncons2GBPAcc -8.21
Source: Morningstar Direct  

 

Top 10 Risers in May 
JPM India C (acc) USD 6.98
iShares Index Linked Gilt Idx (UK) H Acc 6.97
First State Indian Subcontnt III USD Acc 6,57
JPMorgan India (acc) - USD 6.55
L&G All Stocks Index Linked Gt Idx F Acc 6.34
Royal London Index Linked M Acc 6.05
Vanguard US Givt Bd Idx Inv USD Acc 5.83
Neuberger Berman Strat Inc I CG JPY Inc 5.64
PIMCO GIS Glb Rl Ret Admin USD Acc 5.64
Fidelity India Focus Y-GBP 5.55
Source: Morningstar Direct  

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
BGF China D2 USD18.27 USD-0.43
BlackRock Gold and General D Acc1,034.67 GBP1.94
Comgest Growth China EUR I Acc69.17 EUR0.56
Fidelity India Focus Y-GBP2.70 GBP-0.29
iShares Index Linked Gilt Idx (UK) H Acc154.51 GBP0.66
Janus Henderson China Opps I Acc195.80 GBP-0.25
T. Rowe Price Global Tech Eq C GBP13.62 GBP-0.74

About Author

James Gard  is content editor for Morningstar.co.uk

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