Wednesday, 25 January 2017

Top 20 Best Performing Unit Trust Funds for 2016

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Recapping 2016
Before going into the Top 20 Best Performing Unit Trust fund list, let us take a look back at an old post I made somewhere in December 2015. In that post, I highlighted a couple of investment opportunities for 2016 as shown below:

2016 Investment Opportunities
Opportunities that were realized in 2016 based on IME outlook prediction:
  • Adding more Gold related equities to one's portfolio was spot on
  • Investing into India would have yielded desirable results if one were to continuously purchase when the price of Manulife India Equity fund dip about 11.82% in the first Quarter
  • Europe fund (specifically TA European Fund) did not have a good start for the first of 2016. However the 3rd and 4th quarter of 2016 generated decent returns for those whom have invested into the funds during the dips in the 1st quarter of 2016.
  • Japan similarly had a stellar performance during the 3rd and 4th quarter of 2016. Recommended fund Affin Hwang Japan Growth Fund registered 10.15% and 11.74% for 3rd and 4th quarter respectively. 
Surprises of 2016
  • Brazil funds were underdogs going into 2016. Yet these funds perform extremely well to register double digits returns at the end of 2016. I was aware that Brazil was undervalued and attractive for investment. However it was too risky for one to invest into so many uncertainties ongoing in that country. To me, investing into Brazil was a gamble which I chose not to partake.
  • China funds were the other surprise package for 2016. Most of the gains were made in double digit gains during the 3rd Quarter of 2016. 
Concluding 2016
If one were invest too passively (e.g putting one's money into funds for a year without monitoring the performance), one will certainly miss buying opportunities throughout 2016. 

For example funds investing into India, Europe and Japan were under performing during the first half of 2016 which translates into opportunity for investors to invest into the funds at lower prices. Double digit returns were made by these funds during the second half of the year as shown below:

2016 Quarterly Returns (%)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Affin Hwang Japan Growth Fund
TA European Equity Fund
Manulife Investment - India Equity

If an investor was to look into his or her investment every quarterly (especially lump sum investments), I am pretty sure that he or she would have made better returns over his or her investment. Now that we've completed a recap of 2016, let us take a look were the top 20 best performing unit trust funds for 2016.
Top 20 Best Performing Unit Trust Funds for 2016

1) Overview % Returns of the Top 20 funds
More than half the Top 20 funds generated returns between 10% to 20% as shown below:

% Returns
No. of Funds
Above 40%
30% - 39.9%
20% - 29.9%
10% - 19.9%
Below 10%

As an unit trust investor, one should always aim for total portfolio returns of 10% and above. Having 18 of the top 20 funds sitting above 10% in terms of total returns goes to show that it is possible for an investor to achieve the targeted return. 

2) Majority of the Top 20 funds for 2016 are small in terms of fund size

Fund Size
No of Funds
< RM50 million
RM50 million - RM200 million
RM200 million - RM500 million
>RM500 million

This is a repeat of 2015 whereby about 10 funds are below RM50 million in size. This goes to confirm the point that smaller size funds tend to perform better than large sized fund.

3) Breakdown of Top 20 Best Performing Unit Trust Funds by category
  • Asia Pacific funds - 6 funds
  • Resources funds - 3 funds
  • Emerging Market funds - 3 funds
  • Gold/Precious Metal funds - 2 funds
  • Greater China funds - 2 funds
  • Brazil fund - 1 fund
  • Energy fund - 1 fund
  • Australia fund - 1 fund
  • US fund - 1 fund

4) Top 20 Best Performing Unit Trust Funds of 2016

Top 20 Best Performing Unit Trust Funds of 2016

Comparing the Top 20 funds for 2016 with the Top 20 funds of  2015 (as shown below), we can see that opportunities to invest differs on a year to year basis. The 2015 list was largely dominated by Malaysia equity funds, yet in 2016 no Malaysia equity related category and fund made it to the top 20. 

Top 20 Best Performing Unit Trust Funds of 2015
Come 2017, do expect that the top 20 funds for 2017 will also be different from that of 2016. Now the next question on everyone's mind is where to invest for 2017? That my dear readers will be published in another post in which I hope to highlight the market outlook for 2017 and potential opportunities of investment.

That's all for now! 

Gong Xi Fa Cai and Happy Holidays everyone!

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