A £3.8m minnow is among the top performing funds for September in what is being described as a “difficult month” for most fund sectors.
Cape Wrath Focus, which launched just over a year ago, returned 5.8 per cent over the month.
A number of energy funds feature in the analysis of the top-10 performers, although the Cape Wrath product is the smallest followed by a sustainable investing product, the £4.7m CFP SDL Free Spirit fund, run by Rosemary Banyard.
The £12.4m MFM Junior Oils fund topped performance with 7.5 per cent followed by £66.4m Investec Global Energy, which returned 6.7 per cent. Returns of 6.2 per cent from Artemis £41.5m Global Energy meant oil and gas dominated the top three funds.
The SDL UK Buffettology fund and the Neptune Japan Opportunities were among the more mainstream funds featured in the top 10.
Charles Stanley pensions and investment analyst Rob Morgan says the Cape Wrath fund contains just 11 equity holdings and benefited primarily from a surge in the value of Premier Oil, as well as Enquest and Gulf Marine Services.
“Therefore the level of stock specific risk is very high and I would expect the fund to experience a higher level of volatility versus other funds in the UK All Companies sector and deviate significantly from the index.
“This is compounded by the fact that it is primarily small and mid-cap focused, which is unsurprising given the manager’s previous roles at small cap specialist Montanaro.”
The fund, which charges a 20 per cent performance fee, is managed by Adam Rackley. Over a long period it has underperformed the IA UK All Companies sector returning 7.4 per cent over one year compared to 13.3 per cent delivered by its peers.
Morgan says specialist energy funds bucked a largely negative trend for equity sectors in September.
“Brent crude prices hit their highest levels since July 2015 after Turkey threatened to turn off a pipeline through the Kurdish region in northern Iraq following a vote for independence.
However, elsewhere in commodities, Morgan says industrial metals such as iron ore fell “quite sharply” following strength over the summer.