Best and Worst Performing Funds in September

Asia funds spearheaded by Japan continued a winning streak while Latin America struggled

Sunniva Kolostyak 4 October, 2021 | 3:02PM
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Japan funds continued to do well in September as several markets in Asia are on a roll, according to Morningstar Data. On the other end of the scale, Latin America and precious metals failed to rebound.

Large-cap equities in Japan were particularly fruitful in September. The category accounts for most of the top performers this month, despite a year of political uncertainty. However, their new prime minister, Fumiko Kishida took office today (the third in just over a year), and markets are responding positively.

Each month we look at the best and worst performing funds with a Morningstar Analyst Rating. While Japan funds account for most of the top spots, the three highest returns were achieved by investing in energy, China and Indonesia.

Top Performing Funds in September

BlackRock’s World Energy Fund was by far the best performer in September. The fund’s return is double that of number two, at 13.92%, bringing its return so far this year to 35.69%.

UBS (Lux) China A Opportunities is a surprise entry to the top 10. The fund was the second worst in our August round-up, has lost 17.61% so far this year and 13% in the past quarter. But, this month, the Gold-rated fund has achieved a 6.60% return, making it the second best performer.

Jason Hollands, managing director at BestInvest, adds that Chinese shares have been battered this year with the state crackdowns on tech and education sectors, and in the past weeks, there’s been mounting concerns over the position of China’s largest property group, Evergrande. We have previously written about why the Evergrande crisis matters to investors and what opportunities there will be in the aftermath.

Other funds that did well but did not quite make the top 10 were those with a focus on Russian and Indian equities. It was also a strong month for US bonds: AB Mortgage Income returned 2.39%. However, UK bonds were at the other end of the table which is unsurprising as the 10- year gilt yield rose sharply last month.

Worst Performing Funds in September

While China funds have managed to climb higher up on the performance chart, most of the bottom performers from August remain at the bottom in September too. Gold funds BGF World Gold and BlackRock Gold and General both made the bottom 10 last month too, losing 7.29% and 8.09% respectively this month.

Latin American markets are heavily reliant on basic materials such as commodities and natural resources, which explains why they continue to underperform streak. Here too, one fund reappeared: ASI Latin Americal Equity lost 7.96%. Three more Latam funds made the list too, and Aberdeen S Latin American Equity had the biggest loss this month, at 9.11%.

Gustavo Medeiros, deputy head of research at Ashmore, adds: "Two large Brazilian political parties are negotiating to merge. The Argentinian government is in disarray after the poor result in the primary elections."

Two European large-caps from Allianz had a disappointing month as well, losing 6.82% and 6.83%. But, the two were among the few of the bottom performers who are still having an overall positive year, both hovering around the 15% mark. The second worst performer was another fund that has had a positive year overall – but AXA World Funds - Framlington Europe Real Estate Securities has lost 8.12% in September.

Away from the bottom 10, European funds also had a slightly disappointing month, with several seeing negative returns around -5%. These includes funds with a small-cap and large-cap focus.

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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About Author

Sunniva Kolostyak  is data journalist for Morningstar.co.uk