Japanese funds continue to outperform in November

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Shinzo Abe’s strong election win in October and the expected reappointment of Haruhiko Kuroda as the governor of the Bank of Japan have helped propel the country to the top of the tables for fund performance in November.

Legg Mason IF Japan Equity, Baillie Gifford Japanese Smaller Companies and First State Japan Focus were the three country funds that made it into the top five performers for the month. Japanese Smaller Companies and Japan were the top sectors. North America, North America Smaller Companies and Property rounded out the top five sectors.

Shore Financial Planning director Ben Yearsley says Japan has always been an area he has favoured and he remains a buyer of its equities. “Despite the good run in the markets, it remains one of the cheapest developed markets.

Whilst other markets including the US reach all time highs, Japan has to make do with 20 year highs as it is still almost half of the peak of 1989.”

Europe and the UK were the worst performing sectors for the month, possibly due to political uncertainty, with German coalition talks collapsing.

Manek Growth, which sits in the IA Specialist sector, but invests heavily in UK equities, was the the second worst fund for the month and its continued poor performance means it is set to close, which Yearsley welcomes. Schroder Advanced Beta Global Equity Value fund was the worst fund for the month with a loss of 13.2 per cent.

With over 2500 funds onshore in the UK, there is definitely too much mediocrity therefore it is pleasing to see one of the poorer funds close.

“If only more fund groups closed poor active funds the active industry may have a better chance of putting a stronger case for investing in active over passive.”

Fund (top and bottom five)

Return

Legg Mason IF Japan Equity 

+6.2%

Baillie Gifford Japanese Smaller Companies

+6.0%

Argonaut FP Absolute Return

+5.1%

First State Japan Focus

+4.3%

F&C Global Equity Market Neutral

+3.7%

Orbis UK Equity Standard

-4.5%

Standard Life UK Equity Recovery

-4.6%

MFM Junior Oils

-5.2%

Manek Growth

-8.9%

Schroder Advanced Beta Global Equity Value

-13.2%

Source: Shore Financial Planning