INVESTMENT STRATEGIES ASSET CLASS BUBBLES
“
For us its
about approaching
forecasts with a
degree of scepticism,
and looking for backup
in numbers to
actually spot real
changes that are
worth investing in
rather than when
prices just get out
of line
”
Chris Beckett, head of
research, Quilter
Top commodity equity funds over 3 years by Morningstar rating
M’star Fund 1-year 3-year 3-year 3-year 3-year 3-year Launch Dom Curr
rating size (£m) chg (%) chg (%) Sharpe Sortino Alpha Beta date
First State Global Resources A ���� 689.86 68.2 15.91 0.25 0.16 3.37 1.34 27 Oct ’03 UK £
Martin Currie GF Glbl Resources ���� 92.6 45.51 10.96 0.09 0.01 -2.05 1.00 13 Oct ’03 Lux $
JPMorgan Natural Res A Acc ���� 2,159.74 89.61 10.53 0.15 -0.01 -0.31 1.42 01 Jun ’65 UK £
Parvest Global Resources C ���� 101.95 38.46 9.91 0.05 -0.04 -3.45 1.01 26 Sep ’00 Lux $
T Rowe Price Glbl Nat Res Eq I ���� 93.6 48.37 8.91 0.05 -0.07 -3.7 1.13 15 Nov ’06 Lux $
Source: Morningstar
tors are much more wary
of bubbles, have learnt
from past mistakes and are
more astute in timing in
and out of asset classes?
The recession aside, the
big concern for investors
last year was a possible
bubble in corporate bonds.
Certainly, considerable
money was ploughed into
the sector, although judging
by the latest statistics
from the IMA, investors are
now exiting plain vanilla
corporate bond funds in
their droves in favour of
more cautiously positioned
strategic bond funds, presumably
having already
made a tidy profit.
Says Beckett: “It is
always worth watching the
money flows in to different
sectors but behind the
improvement in corporate
bonds they were being
priced on some bearish
assumptions about the
global economy and the
idea of a multi-year recession.
As we went through
last year that became less
likely and we saw the
improvement in corporate
balance sheets, a number
of rights issues and more
sensible financial structures
for a lot of companies.”
But he warns that a risk
of further bubbles always
remains as investors cannot
Top China equity funds over 3 years by Morningstar rating
be sure they are always
putting a sense of reality in
to their expectations.
“People will say this time
it is different far more often
than when it actually is.
For us its about approaching
forecasts with a degree
of scepticism, and looking
for back-up in numbers to
actually spot real changes
that are worth investing
in rather than when prices
just get out of line.”
M’star Fund 1-year 3-year 3-year 3-year 3-year 3-year Launch Dom Curr
rating size (£m) chg (%) chg (%) Sharpe Sortino Alpha Beta date
First State China Growth II ����� 2,506.45 74.58 24.91 0.47 0.49 4.81 0.84 20 May ’92 Ireland $
DWS Invest Chinese Equities A2 ���� 292.11 48.17 22.79 0.42 0.43 2.75 0.86 15 Dec ’06 Lux $
FF China Focus A $ ���� 3,246.34 48.79 22.13 0.4 0.41 2.03 0.91 18 Aug ’03 Lux $
Schroder ISF China Opps A ���� 703.61 43.11 20.38 0.36 0.31 0.57 0.96 17 Feb ’06 Lux $
Allianz RCM China A $ ���� 262.95 48.59 19.95 0.35 0.33 0.15 0.86 8 Nov ’93 Ireland $
Source: Morningstar
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22 PORTFOLIO ADVISER [www.portfolio-adviser.com] MAY 2010
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