Small-cap focused UK funds and Chinese equity funds have been the big fund winners of 2017. Top of the pile is Old Mutual UK Smaller Companies Focus, best investment trusts for growth 2017 returns of 46. 5 per cent, up to December 5.
The fund has had an excellent year as have, perhaps surprisingly, UK smaller companies,’ notes Adrian Lowcock, investment director at Architas. He argues that the manager Dan Nickols is a skilled stock picker and this is what has been driving performance this year. Growth sitting in sixth spot, boasting returns of 38. Chinese equity funds have also fared well over the year. Baillie Gifford Greater China was the second top performer in 2017, with returns of 45.
2 per cent and NB China Equity come third with 45. Invesco PRC Equity, another China fund, came eighth, returning 36 per cent. As China transforms its economy from export-led model to a slower-paced economy fuelled by consumption, it faces many challenges: from environmental pollution to a lack of social services for its growing urban population. However, the Chinese economy has been more resilient than expected this year, and has defied pundits who predicted that it would suffer a painful slowdown. At this year’s Communist Party’s national congress in October, President Xi Jinping continued to consolidate his power. The Baillie Gifford Greater China fund has benefitted from being in a strong performing sector,’ says Lowcock.
The fund has a focus on Chinese large caps and significant exposure to technology, According to Lowcock this has been the correct call in 2017. Chinese tech giants went from strength to strength as corporate earnings rose. Asia and my own money remains on Asia. Japan is still overlooked, but also look out for India gathering momentum again early in 2018, unless we get unexpected state election results. Looking forward to 2018, fundamentals seem positive, but valuations appear stretched and there are still a number of uncertainties on the horizon.
Drip feeding into the market and remaining diversified remains a good option for investors. Keep up to date with all the latest financial news and investment tips by signing up to our newsletter. 10 high yielding shares in the FTSE 100: how safe are their dividends? The content of this field is kept private and will not be shown publicly.