In
true
January
fashion,
we
are
rounding
up
the
best
and
worst
performing
funds
of
2023
–
a
year
that
was
largely
good
for
markets.
The
unexpected
artificial
intelligence
boom,
spearheaded
by
OpenAI’s
release
of
ChatGPT,
was
perhaps
the
biggest
trend
of
the
year.
At
the
other
end
of
the
spectrum,
China
finally
emerged
from
Covid-19
lockdowns,
but
the
expected
economic
boom
did
not
materialise
(again).
With
the
surge
of
interest
in
AI
stocks
and
the
performance
of
the
‘Magnificent
Seven’,
funds
with
a
pure
tech
focus
in
the
Morningstar
category
Sector
Equity
Technology
won
the
year,
averaging
a
return
of
31%.
US
Large-Cap
Growth
Equity,
which
has
a
large
exposure
to
the
same
stocks,
was
close
behind
with
an
average
of
27%.
But
it
wasn’t
just
the
tech
funds
that
did
well
last
year.
Of
the
circa
3,200
funds
in
our
dataset
of
rated
funds
available
for
sale
to
UK
investors,
only
about
300
saw
losses.
The
largest
categories,
mainly
allocation
strategies
of
different
blends,
all
provided
returns
between
5-10%
for
its
investors.
At
the
bottom
end,
the
three
categories
with
the
worst
average
returns
all
invest
in
China.
Both
China
Equity
–
A
Shares
and
China
Equity
fell
more
than
20%
on
average,
and
funds
in
the
Greater
China
Equity
category
averaged
a
loss
of
15%.
A
large
portion
of
the
funds
saw
losses
are
focused
on
Asia,
but
also
thematic
equity
categories
like
Infrastructure,
Natural
Resources,
Agriculture
and
Healthcare
struggled
to
make
gains.
At
the
individual
fund
level,
the
fund
with
the
best
return
in
2023
was
Nikko
AM
ARK
Disruptive
Innovation.
It
is
a
European
version
of Cathie
Wood’s
famous
ARK
Innovation
ETF (which
had
a
torrid
2022)
and
is
advised
by
ARK
Investment
Management
–
and
we’ve
talked
about
the
strategy
multiple
times
this
year
as
it’s
moved
between
best
and
worst
over
the
monthly
updates
(top
in
November
and
bottom
in
October,
for
example).
The
fund
ended
the
year
with
a
return
of
59%,
only
just
edging
out
Liontrust
Global
Technology.
It’s
unusual
to
see
a
fund
with
a
Negative
rating
to
top
the
fund
charts.
Only
two
of
the
best
performing
10
weren’t
pure
technology
funds:
Nikko
AM
ARK
and
PGIM
Jennison
US
Growth,
which
belong
in
US
Flex-Cap
Equity
and
US
Large
Cap
Growth
Equity
categories,
respectively.
We
have
to
look
down
to
38th
place
to
find
a
fund
that
isn’t
tech
or
US-focused
though.
There,
we
find
Jupiter
India
Select
with
a
2023
return
of
32%.
This
is
a
notable
return
as
the
National
Stock
Exchange
of
India
surpassed
Hong
Kong
in
market
cap
terms
to
become
the
seventh
largest
stock
market
in
the
world.
Ben
Yearsley,
director
at
Fairview
Investing,
says:
“I
don’t
think
many
thought
tech
would
be
the
standout
performer
of
2023
–
I
certainly
didn’t.
“In
what
was
a
surprise
to
many,
the
never
never
rally
of
a
few
years
ago
has
reappeared
with
Nasdaq
reaching
an
all-time
high.
This
happened
despite
5%
interest
rates.”
China
Funds
Underperform
Again
As
we’ve
already
seen,
Chinese
equity
categories
certainly
struggled
this
past
year,
and
none
more
than
abrdn
China
A
Share
Equity with
its
29%
loss.
That
said,
all
the
bottom
10
funds
lost
more
than
25%,
and
the
bottom
40
(all
various
Chinese
equity
funds)
all
lost
20%
or
more.
We
have
to
look
to
the
41st
worst
performer
to
find
our
first
non-China
strategy:
WS
Amati
Strategic
Metals,
a
natural
resources
fund
which
also
lost
around
20%.
December
–
A
Strong
End
to
the
Year
for
Equities
We
finish
off
with
a
summary
of
the
best
and
worst
funds
in
December,
a
month
where
many
markets
saw
a
“Santa
rally”.
The
tables
aren’t
too
dissimilar
from
the
overall
year,
but
instead
of
tech,
the
table
is
topped
by
biotech
and
small-caps.
Pictet-Biotech
returned
18%
over
the
month,
taking
the
lead
in
front
of
two
other
funds
in
the
thematic
Sector
Equity
Biotechnology
category.
Baillie
Gifford
Global
Discovery,
a
small/mid-cap
fund,
returned
14%,
but
was
the
only
December
winner
that
still
had
a
negative
2023
overall.
Artemis
US
Smaller
Companies
returned
13%
both
in
December
overall
in
2023.
China,
again,
had
the
worst
December,
albeit
at
a
more
modest
level
than
the
overall
figures
for
the
year.
JSS
Equity
–
All
China
and
Templeton
China
had
the
worst
month,
both
falling
more
than
5%.
Two
Gold-rated
funds
also
feature
here:
FSSA
All
China
and
Wellington
All-China
Focus
Equity,
down
more
than
4%.
We’ll
be
back
at
the
start
of
February
to
take
a
look
at
how
the
first
month
of
2024
pans
out.
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