Ignites Europe - Named: best and worst funds of 2015Print Issue

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Named: best and worst funds of 2015

By Ed Moisson 12 January 2016
Funds investing in smaller companies and Denmark have emerged as the best-performing vehicles of
2015, while those investing in Brazil and natural resources ranked among the worst performers.
The top-performing fund in Europe was a Chinese small cap managed by BNP Paribas Investment
Partners. The Flexifund Equity Small Caps China A returned 148 per cent despite the Chinese market
sell-off over the summer.
It was followed by three Danish small-cap funds managed by boutique Fundamental Invest and BIL
Nordic, part of Banque International Luxembourg, while two other Danish equity funds ranked among
the top 10 performers, according to Morningstar data.

Alex Ko, head of the chief investment officer's office, Asia-Pacific at BNP Paribas Investment Partners,
says Chinese small caps were even more volatile than Chinese A shares last year, but these stocks rose in
both the early months of the year and in the fourth quarter.
Mr Ko says: During periods of extreme volatility we were able to minimise drawdowns by diversifying
into more defensive sectors, before repositioning the portfolio more aggressively [ahead of] the
subsequent recovery.
Swedbank Robur, which has been accused by consumer groups of closet tracking, ranked fifth in the
table. The Swedish asset managers Ny Teknik fund, which invests in smaller Nordic technology
companies, generated a return of 52 per cent compared with a 21 per cent rise for the Vinx Small Cap
index.
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Ignites Europe - Named: best and worst funds of 2015Print Issue

http://igniteseurope.com/pc/1269993/142593

The highest-ranked UK-domiciled fund was Legg Mason IF Japan Equity, a medium and smaller
companies fund. Shiozumi Investments is the investment adviser for the fund and returned 49 per cent in
2015.
At the other end of the scale, the 10 worst-performing funds all lost more than 44 per cent last year.

Falling commodity prices in 2015 was the main reason for funds appearing at the bottom of the table,
with many of the worst performers investing in commodities and resources-related companies, or being
negatively affected by their exposure to Brazil, a major commodity exporter.
Seventy of the 100 poorest-performing funds invest in either natural resources or Brazil, including
broader Latin American funds.
Several funds classified by Morningstar as having flexible allocation objectives also featured among the
10 worst performers.
Matrix Capital Management Trusts Liechtenstein-domiciled FiveStar Focus Fund was the worst
performing in Europe, losing just under 60 per cent over the year and 45 per cent on an annualised basis
over three years.
Matrix Capital Management Trust did not respond to a request for comment at the time of going to press.
Tendercapitals US Turnaround fund was another casualty of the commodities slump, with a loss of 46 per
cent.
Francesco Belloni, manager of the US Turnaround fund, which invests in companies that are in or face
difficulties, says: We are currently diversified on 55 turnaround stories with huge upside potential,
mainly in the energy, basic materials and shipping sectors.
The top-down behaviour of commodities-sensitive sectors, together with the [funds] 100 per cent
currency hedge and 70 per cent average leverage, fully explains last years poor performance.
Two other funds appear among the worst performers for structural reasons.
Mercer Flexible LDI Real Enhanced Matching 1 M-5 is one of a series of funds Mercer Investments
uses as part of its liability-matching solutions for pension funds.

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12/1/2016 4:14 PM

Ignites Europe - Named: best and worst funds of 2015Print Issue

http://igniteseurope.com/pc/1269993/142593

Niall OSullivan, deputy CIO at Mercer Investments, says the fund distributed 38 per cent of its capital
last year, which is not reflected in the performance data shown, explaining much of the funds fall.
Venture Global, a Spanish-domiciled fund, is in the process of being liquidated and has negligible assets
under management. Mirabaud, which manages the fund, says the performance data [are] only a
consequence of this liquidation.
Russia-domiciled funds are not included in this analysis, although several Russian funds grew by more
than 50 per cent last year.
The best-performing Russian fund was VTB Eurobonds, which grew by 65 per cent.
Vladimir Potapov, chief executive officer of VTB Capital Investment Management, says: The Russian
Eurobonds market experienced a sharp recovery in 2015 supported by continued deleveraging of
companies balance sheets, rouble depreciation and central bank support.
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