Best and Worst Performing Funds in June.

Markets continue to surprise investors, with some funds recording their best quarterly returns in 20 years. We look at June's winners and losers

  • Annalisa Esposito
  • 4 min reading time
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June proved to be another astonishing month for markets, with some funds recording their best quarterly returns in more than 20 years. Hot on the heels of May's recovery, the top performers produced hefty returns of up to 13.2% in June.

But if there was a clear winner in the month, it was China. Our monthly analysis of UK-domiciled funds that are rated by Morningstar analysts shows seven of the top 10 performers are China-focused funds, followed closely by those investing in Asia and Emerging Markets.

"A multitude of factors is at play but these regions had the virus early and, in many countries, handled it much better. That combined with more manageable debt levels and better demographics are all relevant to investment markets," says Ben Yearsley, director at Shore Financial Planning.

Top Performing Funds in June

Leading the pack is the Silver-rated JPMorgan China A-Share Opportunities fund, which brought home double-digit returns during the month, gaining an impressive 13.2%. According to Morningstar Direct, the top contributors to the fund’s performance in the month were travel agency China International Travel Service (601888) and Internet-solution provider Luxshare Precision Industry (002475), whose shares soared an incredible 53.7% and 51.5% respectively as the country's recovery got well and truly underway. 

China was among the first countries to announce lockdown measures, as well to ease them. It is unsurprising then, that the travel sector has recovered more quickly than in developed countries where there are fears of second wave and governments are reluctant to open their borders.

Looking at sector breakdown within the fund's portfolio, technology and healthcare were standout performers, returning 19.2% and 19.1% for the fund. Both sectors have benefitted significantly from the coronavirus pandemic and lockdown measures, which have accelerated secular trends such as remote working and online shopping.

Also among the top performing funds for the month are Bronze-rated Invesco Greater China and Neutral-Rated Allianz China Equity, up 13.1% and 12.6% respectively. Other names which stand out include Silver-rated Matthew Pacific Tiger fund, Bronze-Rated JPMorgan Asia Growth and JPMorgan Emerging Markets. All three funds have a growth bias and so a high concentration in tech and healthcare stocks.

Fund Morningstar Analyst Rating AUM (£m) June Return (%)
JPM China A-Share Opportunities Silver 944.4 13.2
Invesco Greater China Equity Bronze 1043.9 13.1
Allianz China Equity Neutral 330.2 12.6
JPM China  Bronze 1553.7 12.5
JPM Greater China Bronze 749.5 12.2
Matthews Pacific Tiger Fund Silver 376.9 11.8
Schroder ISF China Opportunities Gold 863.8 11.6
Schroder ISF Greater China Silver 1309.5 11.5
JPM Asia Growth Bronze 1610.5 11.5
JPM Emerging Markets Bronze 2137.2 11.3

Worst Performing Funds in June

At the foot of the table is a mixed bag of sectors. The Negative-rated Alken Small Cap Europe and Neutral-rated Alken European Opportunities had the toughest month, tumbling by 4.7% and 3.7%. According to Morningstar Direct, the main detractor for both the funds was a holding in German payment processor and financial services provider Wirecard (0O8X), whose shares dived 94% amid a scandal whereby a €1.9 billion hole emerged in the company's finances. The two funds had big stakes in the business, which has now gone into administration, occupying 9.7% and 9.3% of their portfolios respectively. The Wirecard scandal has caused many investors to question whether fund managers should hold such a large proportion of their assets in any single stock.

Japanese funds occupied the most positions in the table, with Neutral-rated Janus Henderson Horizon Japanese Smaller Companies, Silver-rated Eastspring Investment Japan Dynamic and Bronze-rated Man GLG Japan Core Alpha all appearing in the bottom-performers list. 

"It’s difficult to know whether to be optimistic or pessimistic about markets. Most developed world markets seem to have moved out of the coronavirus funk, recording some of the best quarterly returns on record," says Yearsley. "But in some parts of the developing world it is a different story with Brazil, for example, still in the eye of the storm."

Fund Morningstar Analyst Rating AUM (£m) June Return (%)
Alken Small Cap Europe Negative 88.1 -4.7
Alken European Opportunities Neutral 588 -3.7
JH Horizon Japanese Smaller Companies Neutral 196 -3.7
Eastspring Inv Japan Dynamic Silver 758.2 -3.5
Man GLG Japan CoreAlpha Bronze 1278.3 -3.5
Liontrust Special Situations Bronze 5307.3 -2.3
First State Global Listed Infra Bronze 1223.3 -2.1
ASI UK Ethical Equity  Neutral 293.7 -2.0
BGF World Energy Neutral 2597.4 -2.0
Winton Diversified  Bronze 330.1 -1.8

 

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