FE fundinfo reveals top performing funds and sectors for Q3 2024

FE fundinfo, a leading financial data company, today released data showcasing the best performing funds and sectors for the third quarter of 2024. It revealed the top performing funds had high exposure to the late surge in Chinese equities and the rally in the price of gold – which neared a record high of $2,700/oz. The data also showed the underlying volatility of the rally in China, with Chinese equity funds topping the list of riskiest funds in Q3.

Overall, the top three funds for Q3 2024 were Matthews China I Acc GBP (22.13%), Invesco MSCI China Technology All Shares Stock Connect UCITS ETF Acc (21.62%), and Xtrackers MSCI Thailand UCITS ETF 1C GBP (21.42%).

The data – drawn from trusted fund research and analysis platform FE Analytics – highlights the top-performing funds registered for sales in the UK across four of the key Investment Association universes, as well as the most volatile funds during the same period.*

Best performing funds

Sterling Strategic Bond

In the Sterling Strategic Bond universe, the top-performing fund for Q3 2024 was Aegon Strategic Bond, delivering a strong return of 7.97%.
Commenting on the data, Charles Younes, Deputy Chief Investment Officer at FE fundinfo said: “Over the quarter, bond yields fell as recessionary risks increased and central banks, including the Federal Reserve, initiated their rate-cutting cycles. This proved beneficial for bond managers, such as Janus Henderson Strategic Bond, which were well positioned for this outcome due to a higher sensitivity to interest rate movements.”

IA Global Equity

In the IA Global Equity universe, gold-exposed funds performed best, led by the iShares Gold Producers UCITS ETF with a 12.53% return. Funds exposed to interest-rate sensitive sectors such as Utilities equities also performed well, as was the case for Xtrackers MSCI World Utilities UCITS ETC which returned 10.87%.

Charles Younes, Deputy Chief Investment Officer at FE fundinfo, said: “Gold-exposed funds outperformed in IA Global Equity. Since July, gold has rallied in a trend often seen during periods of geopolitical uncertainty and falling interest rates. For instance, the Federal Reserve’s decision to cut interest rates by 50 basis points drove greater demand in Q3, with many investors speculating the Fed will maintain their interest rate cutting schedule. Geopolitical tensions, particularly the recent escalations in the Middle East, similarly contributed to this traditional ‘flight to safety’ to gold, driving the success of funds like iShares Gold Producers UCITS ETF.”

IA Global Emerging Markets

In the IA Global Emerging Markets universe, MFS Meridian Emerging Markets Equity led the way with a return of 9.97%, followed by Akiya Global Emerging Markets at 8.45%.

Charles Younes, Deputy Chief Investment Officer at FE fundinfo, explained: “Emerging Markets closed the third quarter in positive territory, largely driven by a late surge in Chinese equities. Fund managers flocked here following the optimistic reception of Beijing’s announcement of comprehensive policy easing and targeted support for both the property and stock market at the end of September. This was pivotal in lifting stock market sentiment, especially just ahead of the Golden Week holiday. This late rally pushed Chinese stocks back to levels last seen in May, helping erase much of the year’s earlier losses.

“Funds with a larger-than-benchmark exposure to China benefited most from this, as was the case for MFS Meridian Emerging Markets Equity, which led the universe with a 9.97% return.”

IA UK All Companies

In the IA UK All Companies sector, Baillie Gifford led the pack with a return of 7.81%, followed by Ninety One UK Equity Income I Acc at 7.12% and JOHCM with 7.00%.

Charles Younes, Deputy Chief Investment Officer at FE fundinfo, said: “The UK Equity sector in the third quarter of 2024 saw little in terms of overarching trends, with performance largely driven by stock-specific factors rather than macroeconomic influences.

“Royal London, which returned 6.11%, and Aviva, up 6.06%, had strong starts to the quarter, bolstered by their holdings in Hill and Smith, which saw a 17% rise in July. Meanwhile, JOHCM and Baillie Gifford, which posted 7.00% and 7.81% returns respectively, ended the quarter on a high. Their more concentrated portfolios and strategic bets on industrials and consumer discretionary stocks played a key role in their success as the quarter progressed.”

Best Performing Sectors

The best performance was from the China/Greater China sector which delivered an impressive return of 12.22%, while sectors like Property Other and Infrastructure also posted strong performances, delivering returns of 8.84% and 6.92%, respectively.

Charles Younes, Deputy Chief Investment Officer at FE fundinfo, commented: “The surge in Chinese equities was largely driven by the unveiling of a comprehensive stimulus package from the People's Bank of China at the end of September. A pledge from the Politburo to introduce further steps to reignite economic growth and stabilise the beleaguered property sector followed shortly after and further contributed to a boost in market sentiment.”

“Gold-exposed funds also performed strongly, benefiting from a surge in gold prices, which reached a new high of almost $2,700/oz over the quarter. Demand was bolstered by structural buying from emerging market central banks, particularly the People’s Bank of China.”
 

Riskiest Funds

Chinese equity funds also ranked among the riskiest funds, with several China-focused funds such as Redwheel China Equity Matthews China, and Baillie Gifford China topping the list of most volatile funds this quarter.

Charles Younes, Deputy Chief Investment Officer at FE fundinfo, commented: “Despite their strong performance, Chinese equity funds were among the most volatile in the third quarter of 2024. Sentiment fluctuated significantly during the period, with recessionary risks increasing until a series of stimulus announcements in the final week of September shifted outlook.

“However, while these measures provided a short-term performance boost at the end of the quarter, it remains unclear whether they will have a lasting impact on China’s economic recovery. Furthermore, since the end of September, China’s stock market has faltered with some benchmark share indexes experiencing their biggest daily losses since the COVID-19 pandemic began.”

*Editor’s Note: All funds analysed by FE fundinfo were registered for sale in the UK, as registered by the Investment Association. More on the IA here.