The funds hit hardest by Coronavirus

Writer,

Ryan Hughes, AJ Bell's Head of Active Portfolios, looks at the worst performing funds from Asia, China, Emerging Markets and Global sectors so far this year.

Fund IA Sector Performance from 01/01/20 – 04/02/20
Schroder Global Energy Global -11.52%
Guinness Global Energy Global -10.59%
Meridian Global Energy Global -6.56%
AB Asia Ex Japan Equity Portfolio Asia Pacific ex-Japan -6.01%
Barclays Global Access Asia Pacific Ex-Japan Asia Pacific ex-Japan -5.60%
ASI China A Share China/Greater China -5.35%
New Capital China Equity China/Greater China -5.31%
Artemis Global Emerging Markets Global Emerging Markets -5.29%
Barclays Global Access Emerging Market Equity Global Emerging Markets -5.22%
Waverton Asia Pacific Asia Pacific ex-Japan -5.19%

Source: FE

“It’s interesting that the three funds that have been hardest hit are all global energy funds, showing that the effects of Coronavirus are not confined to emerging markets funds," says Ryan.

"Concerns around the impact the outbreak will have on the growth of the global economy and China in particular, is leading to fears that there will be lower demand for natural resources.

“Nearly all Chinese equity funds have been hit hard by the Coronavirus outbreak, with only three out of 38 funds in the sector showing positive performance this year. Asian and general Emerging Markets funds are also among the worst affected.

“Investors will understandably be concerned about what impact Coronavirus is having on their portfolios but as always it is important not to panic and make knee-jerk decisions that could simply lock in losses.

“While it may be tempting to head for the exit, long term investors should remember that it is time in the market more than timing the market that is important. If we look back to the SARS outbreak in 2002 – 2003, it had a short term negative impact on markets but once the outbreak had been contained, markets recovered very quickly. Investors selling at the first sign of short term volatility therefore lock in losses that have already been incurred and then miss the bounce back once things have calmed down. Some canny long term investors may even be seeing now as an opportunity to top up their exposure to China or Asia / Emerging Markets more generally.

“There is no doubt that staying calm as an investor in these situations can be difficult. It can help to remind yourself what your original investment objectives and time horizon were and decide whether the current situation really changes those. Emerging markets are likely to represent a small portion of most investors’ portfolios so the overall impact should be limited. Now is the time for a steady hand and to stay focused on your long term goals and objectives.”

IA fund sector No. funds in negative performance No. funds in positive performance
Asia 94 18
China 35 3
Emerging Markets 88 26
Global 82 251

Source: FE

These articles are for information purposes only and are not a personal recommendation or advice.


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Written by:
Ryan Hughes

Ryan Hughes is Head of Active Portfolios at AJ Bell. He has 20 years of experience in finance and investments and started his career working as a financial adviser before becoming an investment analyst and discretionary fund manager as well as twice being named one of the most influential financial advisers in the UK. In 2006, Ryan joined Skandia Investment Management as a fund manager, sitting on both the investment committee and global asset allocation committee before then joining Apollo Multi Asset in 2013. In October 2016, Ryan joined AJ Bell to help establish the investment research capability.