Specialist funds: a reliable alarm signal
Research into the performance of 1500 funds has revealed that only 14 made positive returns in May. And there are two important lessons to be learned from this.
After examining the performance of more than 1,500 funds, research from Trustnet.com has revealed that between 11 May and 6 June, only 14 funds, essentially bond funds, made positive returns. The ten worst-performing funds fell by more than 15%, but their one-year performance record to 6 June tells a different story. They are all up more than 30%.
According to Brian Dennehy of financial adviser Dennehy Weller & Company, there are two lessons to be learnt from this. The first is to drip cash into emerging market funds monthly, as timing is everything when it comes to this volatile sector.
The second, he tells The Mail on Sunday, is that when investment houses begin launching specialist funds, alarm bells should start ringing. "It's usually a signal that the boat has been missed," he says. Allianz Global Investors and Threadneedle launched emerging market funds earlier this year, RCM Bric Stars and Global Emerging Markets respectively. The former is down 5% since launch, and the latter more than 10%.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.
-
Reeves ‘looks at minimum UK shareholding' in ISA reform
On top of a rumoured £10,000 cash ISA limit, chancellor Rachel Reeves is reportedly considering adding a minimum UK shareholding requirement to the stocks and shares ISA
-
Rightmove: Asking prices rise by 0.3%, but increase is lower than typical for October
October saw asking prices grow by £1,165 on average, Rightmove says, but the increase is far below the usual autumn bump as the property market braces for next month’s Budget.