Which funds were the winners and losers of the last tax year?


Small cap focused funds and those concentrating on quality stocks outperformed in the last tax year, while those exposed to resources came bottom of the heap.

Legg Mason Japan Equity fund was the best performer over the 2015/16 tax year, according to research from Charles Stanley Direct.

The firm looked at the top and bottom 10 performing funds, with the Legg Mason Japan Equity fund, managed by Hideo Shiozumi, returning 48.6 per cent for an early bird ISA investor last tax year.

Charles Stanley Direct pension and investment analyst Rob Morgan says: “Shiozumi focuses on growth companies positioned to benefit from the development of the ‘New Japan’ – firms able to exploit opportunities relating to Japan’s advanced elderly society, changes in consumer spending and lifestyles, and a broadening internet-based economy.”

Other winners over the 12-month period from April 2015 to April 2016 were those exposed to small cap stocks, including the MI Chelverton UK Equity Growth fund, which delivered a 21.4 per cent return. Also in the top 10 were the TB Amati Smaller Companies and MFM Techinvest Special Situations funds.

Among the growth winners were the Fundsmith Equity fund and the Man GLG Continental European fund, which focuses on companies with strong competitive positions.

However, the worst performing fund for this tax year has been the MFM Junior Oils Trust, which had negative returns for three consecutive tax years. It returned -34.6 per cent over the period.

Morgan says: “The poorest-performing fund list for the period contains less variety. Over the course of the tax year energy funds had a difficult time, and despite a resurgent oil price in recent months they represent three of the top five fallers.”

Other bad performers were the Neptune Africa fund, returning -26 per cent, followed by the Artemis Global Energy fund at -23.7 per cent and the Investec Global Energy fund at -23.3 per cent.

“Natural resources and commodity funds also performed badly,” says Morgan. “Commodity prices, with the exception of gold, collapsed further in the early part of 2016 with oil reaching multi year lows; although a sharp turnaround from February provided some relief as global growth concerns subsided.”

He adds: “Funds investing in emerging markets and, in particular, China followed a similar pattern, and following several years of very strong performance the biotech sector came under pressure as investor sentiment waned and concerns about the sustainability of drug pricing took their toll.”

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                   Source: FE Analytics.