QuotedData does a quarterly report on investment companies listed in the United Kingdom, including performance figures on a price and net asset value (NAV) basis.
This quarter was different in that it was affected by a major macroeconomic event in the Brexit vote. Several sectors, mainly property and UK mid & small caps were sharply affected by the referendum, with private equity the sector that was hit the most.
The median discount within the private equity sector moved from -25.34% on the day of the vote to -32.21% one week later.
Brexit effect
“The UK referendum result hit funds that would be most affected by a slump in the UK economy in particular,” said James Carthew, QuotedData research director. “No doubt, some investors will see this as an opportunity to top up exposure at lower prices. We have already seen a bounce in the share prices of many UK property funds,” he added.
Most notably, Q2 saw a recovery of funds exposed to the commodities and natural resources sector – a trend continuing on from the first three months of 2016.
Vietnam grows
Vietnam-focused funds were also among the best performers in the second quarter of 2016. “The country’s economy is doing relatively well and restrictions on foreign ownership of companies have been eased,” said the report.
The best performer in NAV terms was VietNam Holding, while Vinacapital Vietnam Opportunities and Vietnam Infrastructure have been selling off some property investments.
Latam recovers
Two Latin American funds, JPMorgan Brazil and Aberdeen Latin American Income, were ongoing beneficiaries of a resurgence of interest in the region post the impeachment of the Brazilian president.
“The continued strong performance of the commodities and natural resources sectors may need more evidence of an improvement in the Chinese economy if it is to be sustained,” said Carthew.
He continued: “For investors looking for country specific emerging markets exposure, the improving fundamentals in Vietnam could continue to power its rising stock market. We also like India which has one of the strongest economic growth rates of any major country.”
