Best and Worst Funds in September

Japan focused funds top the performance tables in September, even after the announcement of Prime Minister Abe's retirement, while emerging Europe lags

Annalisa Esposito 2 October, 2020 | 9:33AM
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top and bottom performers

September was a strong month for Japanese funds even as the country's Prime Minister Shinzo Abe announced plans to retire due to ill health. 

According to Morningstar Direct, eight of the 10 best performing funds last month were Japanese focused. We’ve looked at funds that have a Morningstar Rating only.

September's Best Performing Funds

Ben Yearsley, director at Shore Financial Planning says: “Are there good reasons for this Japanese dominance? A cheap stock market, well capitalised companies, innovative technology, and political stability (even though there was a new Prime Minister) might have something to do with it.”

Fund Morningstar Analyst Rating Morningstar Category September Return (%)
JPM Japan Bronze Japan Large-Cap Equity 10.7
FSSA Japan Equity Neutral Japan Flex-Cap Equity 10.5
JPM Japan Equity  Neutral Japan Large-Cap Equity 10.1
T. Rowe Price Jap Equity Bronze Japan Large-Cap Equity 9.7
Comgest Growth Japan Silver Japan Large-Cap Equity 9.6
T. Rowe Price Japanese Equity  Neutral Japan Large-Cap Equity 9.6
JPM Korea Equity Silver Korea Equity 8.6
Franklin Biotechnology Discovery Neutral Biotechnology 8.3
JH Horizon Japanese Smllr Cos  Neutral

Japan Small/Mid-Cap Equity

Baillie Gifford Japanese Inc Gwth Bronze Japan Large-Cap Equity 7.8

At the top of the table is the Bronze-Rated JPM Japan, which produced a return of 10.7% in a single month. The £1.7 billion fund has weathered the coronavirus storm quite well, generating gains 26.3% year to date. Among its main contributors to performance are automation sensors manufacturer Keyence and Japanese e-commerce company MonotaRo (3064), up 17% and 29.7% respectively in the month. 

Japan contains myriad stocks, including many lesser-known names, as is often considered something of a safe haven at times of uncertainty. Morningstar analyst Samuel Lo likes JPMorgan's Tokyo-based manager, Nicholas Weindling, because “he has continued to demonstrate a deep understanding of the portfolio holdings and how they fit into the team’s investment philosophy".

Hot on the fund's heels is the Neutral-Rated FSSA Japan Equity, which also produced an impressive return of 10.5%.

Just two funds in the top performers list are not Japan-focused and these are JPM Korea Equity, which is benefitting from the ongoing rise of tech stocks, and Franklin Biotechnology Discovery, whose sector is back in favour as the hunt for a Covid-19 vaccine continues. The funds produced a return of 8.3% and 8.1% respectively in the month. 

The Worst Perfomers

While the top performers belonged mostly to one category, the worst performing funds are a mixed bag.

At the bottom of the table is the Neutral-Rated BGF World Energy, which tumbled by 10.4%. “This is because Oil & Gas was the worst performing sector in September despite a relatively stable oil price over the last few months,” says Yearsley. Oil and gas have been hit hard by the coronavirus crisis, and this fund has had a very bad year - down 41% year to date.

Three UK-focused funds also feature in the mix: Neutral-Rated Ninety One UK Special Situations, the Bronze-Rated Franklin UK Mid-Cap and the Bronze-Rated JOHCM UK Dynamic – which fell by 7.7%, 5% and 4.9% respectively.

The main detractors of the Ninety One UK Special Situations performance were British low-cost airline group Easyjet (EZJ) and British engineering company Rolls-Royce (RR), which fell by 46.1% and 20.8%. Just this week Rolls-Royce was forced to raise £5 billion in emergency funding as it struggles to cope with the effects of the Covid-19 crisis. 

The Fidelity Indonesia fund stands out as a niche offering in the bottom performers. One of the country's main tourist desinations, Bali, had planned to open its borders to international travellers again in September but the governor of the island said last month it would put off reopening until next year. 

Fund Morningstar Analyst Rating Morningstar Category Return (%)
BGF World Energy  Neutral Sector Equity Energy -10.4
NinetyOne UK Special Sits  Neutral UK Flex-Cap Equity -7.7
Fidelity Indonesia Neutral Indonesia Equity -7.4
ManGLG Underval'd Assets Silver UK Flex-Cap Equity -7.1
Schroder Income Bronze UK Equity Income -5.8
JPM Emerging Europe Eq Neutral Emerging Europe Equity -5.3
Franklin UK Mid Cap  Bronze UK Mid-Cap Equity -5.0
Schroder Europe Recovery Neutral Europe ex-UK Equity -4.9
BGF World Gold  Bronze Precious Metals -4.9
JOHCM UK Dynamic Bronze UK Flex-Cap Equity -4.6

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Annalisa Esposito  is a data journalist for

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