3 Best Performing Funds of 2015

Which is the best performing fund of the year? Morningstar analysts give their insights into three of the most successful - and top rated - funds of 2015

Karen Kwok 23 December, 2015 | 1:01PM
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2015 has been a very gloomy year for commodities markets. The slump in the oil and iron ore price has sent commodity companies share prices, down sharply. Markets in Latin America, Turkey and other emerging markets have suffered as a result.

But smaller companies, especially those Europe and the UK have had a much better year. In terms of single country performance, Japan is standout. As a result, funds exposed to the region come out as the best performers of 2015, alongside smaller companies funds.

However, experienced investors know past performance is not an indication of future returns – however a Gold, Silver or Bronze Morningstar Analyst Rating is.

Using the Morningstar Fund Screener we have identified the best performing funds of 2015, and then filtered out those that analysts do not have conviction in. As a result here are the highest rated, best performing funds of 2015.

Lindsell Train Japanese Equity

Return YTD: 28%

This Bronze Rated equity fund applies a bottom-up process, seeking sustainable cash-generative business franchises and aiming to hold them over the long run, according to Morningstar analyst Daniel Vaughan.

“The fund's long-term investment mindset, concentration in the portfolio, and high active risks can lead to variability in peer relative returns on a calendar-year basis, but its risk/return profile over longer periods is attractive. Outperformance over a 10-year period has been achieved with less volatility and a superior drawdown to peers,” Vaughan said.

Standard Life UK Smaller Companies

Return YTD: 26%

This Silver Rated fund remains a worthy choice for investors although the fund is no longer one of the highest conviction picks among Morningstar analysts. Fund manager Harry Nimmo, a small cap investor with good long-term record, remains a key strength, Morningstar analyst Vaughan said. While the fund remains many positives such as a quality growth approach that has been consistently applied and having a well-experienced fund manager, Vaughan says that Morningstar analysts have less conviction given the combination of the change in the market cap composition, recent performance issues and the fee hurdle.

Franklin UK Smaller Companies

Return YTD: 23%

This fund is rated Bronze by Morningstar analysts. Under the current partnership management of Paul Spencer and Richard Bullas, the fund has delivered on a more consistent basis, Morningstar analyst Samuel Meakin said.

“The fund is built from the bottom up with no deliberate style biases and without reference to the benchmark index,” Meakin said. “The managers seek to build a balanced portfolio, with investment ideas typically fitting into one of three investment categories: high-quality growth, undervalued & overlooked, and cyclical & recovery.

“They look to gain a thorough understanding of the risks of a company, from customer and concentration risk to pricing, before finally accessing its valuation. With this in mind, downside risk is a key focus in the investment process.”

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.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Franklin UK Smaller Companies A Inc  
Lindsell Train Japanese Eq A Yen Acc487.57 JPY0.39Rating

About Author

Karen Kwok

Karen Kwok  is a Reporter for Morningstar.co.uk