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China equity funds dominate in 2017, while fixed income funds languish

Jeffrey Tan
Jeffrey Tan12/25/2017 08:00 AM GMT+08  • 12 min read
China equity funds dominate in 2017, while fixed income funds languish
SINGAPORE (Dec 25): The year 2017 has been a banner year for global equities as economic growth improves and inflation remains low. So, it is no surprise that the best-performing funds are largely those that invest in equities. Meanwhile, rising interest
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SINGAPORE (Dec 25): The year 2017 has been a banner year for global equities as economic growth improves and inflation remains low. So, it is no surprise that the best-performing funds are largely those that invest in equities. Meanwhile, rising interest rates have led to the languishing of many fixed income funds.

Historically, equities tend to do well in times of growth. Meanwhile, fixed income assets typically falter in an environment in which interest rates are rising. But other factors play important roles in determining a fund’s performance, including global political shifts, industry cycles and stock selections.

Equity funds that invest in China-focused equities dominate the list of best-performing funds this year. Their stellar performance is driven largely by their exposure to the technology sector, especially the so-called BAT stocks — referring to internet giants Baidu, Alibaba Group Holding and Tencent Holdings. A prime example is the Investec GSF All China Equity A Acc fund. According to Morningstar data, the fund has returned 52.2% in the year to Dec 18. It is also the top-performing fund among Singapore-registered funds available to retail investors.

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