Just
in
time
for
emerging
markets
week,
China
funds
were
some
of
the
worst
performing
funds
in
what
was
an
abysmal
month
for
markets
around
the
world.

Emerging
markets
have
not
had
an
outstanding
year
anyway,

and
as
we
covered
earlier
this
week
,
we’ve
seen
a
string
of
bad
economic
news
stem
from
China
in
particular.
This
month,
Brazil
also
made
an
appearance
in
the
bottom
10
performing
funds
available
for
sale
in
the
UK,
despite
sporting
slightly
better
year-to-date
results.

Less
than
500
funds
managed
a
positive
return
out
of
a
selection
of
over
3,000
Morningstar
Medalist-rated
funds.
No
fund
returned
above
4%,
and
just
about
120
funds
did
better
than
1%.
That
said,
the
spread
is
not
particularly
wide,
as
only
two
funds
saw
negative
returns
in
the
double
digits.

Climate
change
and
clean
energy
also
struggled
in
August,
with
a
couple
of
funds
with
weaker
returns
than
the
worst
performing
China
funds.

Among
the
best
returners,
energy
funds
were
back
again

at
least
in
comparison
to
the
rest
of
the
fund
market.
The
top
10
is
rounded
off
with
the
addition
of
a
variety
of
equity
strategies.

Guinness
Global
Energy
appears
with
both
its
UK
and
Irish
versions,
returning
3.95%
and
3.23%.
These
two
strategies
were
also
the
only
two
found
in
the
top
10
with
negative
year-to-date
performance.

BGF
World
Energy
 was
the
third
energy
fund,
and
the
biggest
in
the
list
at
about
£2.4
billion.
It
returned
3.44%
in
August.

The
rest
of
the
top
performing
list
is
a
variety
of
strategies
with
no
clear
trend.
Silver-rated

Artemis
US
Smaller
Companies

was
the
best
performer
among
these,
with
3.23%.
Its
portfolio
is
heavily
skewed
towards
industrials
(accounting
for
36%
of
the
portfolio).
The
highest
rated
fund
was
Gold-rated

GQG
Partners
US
Equity

(returning
2.77%)
a
strategy
categorised
as
US
large-cap
blend
equity.
However,
its
holdings
sit
far
into
the
growth
spectrum
according
to
our
analysis.

China
equities
accounted
for
a
significant
part
of
the
bottom
50
performing
funds
last
month,
and
the
worst
performer
among
these
was
Gold-rated

FSSA
All
China
,
down
9.12%.

Much
of
the
negativity
over
China
is

due
to
the
property
sector

and
concern
surrounding
Country
Garden,
the
largest
private
developer
(which
recorded
losses
of
£5.3
billion
for
the
first
half
of
2023).

We
have
previously
covered
which
funds
hold
exposure
to
the
company
.

Ben
Yearsley,
director
at
Shore
Financial
Planning,
explains
that
the
People’s
Bank
of
China
has
started
stimulating
the
economy
with
various
rate
cuts
in
anticipation
of
its
impact.

“Market
watchers
are
keeping
a
close
eye
on
the
Chinese
property
sector
as
if
that
implodes,
markets
both
in
the
Far
East
and
globally
will
be
extremely
messy,”
he
says.

The
worst
performer
of
all
was

last
month’s
top
performer
Nikko
AM
ARK
Disruptive
Innovation
,
a
European
version
of
Cathy
Wood’s
famous
ARK
Innovation
ETF
(which
had
a
torrid
2022).
The
fund
is
advised
by
ARK
Investment
Management.
Overall,
despite
losing
11.58%
in
August,
the
fund
is
up
35.48%
so
far
this
year,
and
featured
in
the
top
10
in
our
roundup
of
the
best
performers
in
the
first
half
of
the
year.

The
two
climate-focused
funds
in
the
bottom
were

GMO
Climate
Change
Investment
,
a
thematic
fund
in
the
ecology
category
(down
10.88%)
and

Schroder
Global
Energy
Transition
,
categorised
as
an
alternative
equity
fund
(down
9.39%).

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