Neptune European Opportunities was the only fund among the top five performers in October without a Latin America remit, returning 14.16 per cent over the course of the month and sitting in second place, according to investment service Wealth Club.
Ben Yearsley, investment director at Wealth Club, attributes the performance to the manager Rob Burnett’s pro value stance and the fund’s allocation to financials, which saw a rebound.
The best-performing fund was Neptune Latin America, which was up 17.31 per cent, with Threadneedle Latin America, Invesco Perpetual Latin America and Aberdeen Latin America rounding out the top five, with their performance likely supported by rising commodity prices.
The five worst-performing funds were all bond mandates, with CF Odey Absolute Return bringing up the rear having fallen 8.86 per cent. Yearsley questions whether the bond bull market has now turned.
“Has the bond bubble burst, or is recent performance a short-term blip before bonds resume their multi decade bull run”, he says. “Maybe the political reality has started to bite with investors realising that yields were simply unattractive and unsustainable in the long run with a sliding global economy. There also seems to have been a shift in mindset saying that central banks no longer have monetary firepower and it’s down to governments to fiscally stimulate economic growth.”
He adds: “If the bond markets have turned, does that mean the large defensive growth companies that have been in vogue over the last few years will now start underperforming too? The so-called bond proxies have had a tremendous run, but look expensive today. Value had a storming month in October, so it will be interesting to see if that can continue for the remainder of 2016.”