The one-year performance figures show just how badly the US equity sector has fared this year although three-year figures remain positive
The US equity sector has suffered heavy losses this year with the average fund dropping -19.93%.
Performance was positive the previous two years, the average for last year being 13.3% and the previous year being 32.13%. Furthermore, looking at the three-year performance figures, the average remains positive at 22.13%.
Of the 205 funds in the sector last year only two had positive performance figures. In contrast, all the funds had positive ratings in between 1998 and 1999.
The All Points Index US Geared fund, managed by Bermuda International Investment Management, was hit hard last year and made losses of -41.06% compared to gains of 47.27% between 1998 and 1999.
It fell from being in the 10th percentile between 1998 and 1999, to being in the 98th percentile the following year, and only slightly improving to the 97th percentile the next year. Over a three-year period the fund has had losses of -11.96%.
The fund is a passively managed fund designed to approximately double the return of the S&P 500.
However, Leanne Alami-Merroni, marketing manager of Bermuda International Investment Management, says: 'This also means the fund will double the losses of the S&P 500 if the index were to decline.
'The fact that the fund is an indexed passive investment vehicle which primarily uses index futures and options to replicate the index means questions relating to purchases and sales, judging the market and stocks held are not applicable to this fund. In addition, performance in terms of gains and losses are entirely related to the rise and fall of its relevant benchmark index, the S&P500.'
She adds: 'In short, if the S&P500 is performing well, then the US Geared fund should be returning somewhere around double the index return. If the S&P500 is negative, the US Geared fund should be down roughly twice that amount. As long as it is doubling the return of the S&P 500, positive or negative, it is performing as it should.'
The Aberdeen IF American fund has also suffered losses over a three-year period, dropping -8.77%.
It was in the 72nd percentile in between 1998 and 1999 and had a performance average of 19.06%, it dropped to being in the 90th percentile the following year with a performance average of 2.4%, then improved the next year to the 80th percentile with a performance average of -28.01%. Over a three-year period the Aberdeen IF American fund has had two different managers, which may have had an impact on the fund's performance.
Before October 2000, the fund was outsourced to American-based investment company Duff & Phelps. When Duff & Phelps were managers they had a value- orientated approach. However, at this time the market was growth orientated.
Aberdeen took the decision to change the style of the fund and the manager to give the company more credibility and control of what was going on. The fund is currently being run by Rupert Della-Porta and has a growth- orientated bias.
The fund has crept up the rankings since Rupert Della-Porta took over, the portfolio now being 80th percentile compared to previously being 90th.
Della-Porta attributes the relative improvement in the fund's performance to investing in a broad range of individual companies that are growth orientated.
Throughout the year the fund was relatively neutral in sectors. Although the fund still suffered heavy losses last year and its performance was -28.01%, Della-Porter says a couple of good investment decisions were made through-out the year in the fund.
The fund played the deregulation theme in the energy sector in the early part of the year and capitalised on the increased investment in this area. He also sold out of the technology stocks and, although the move was a little late, Della-Porta says it proved to be a good decision.
Aberdeen IF American fund looks to invest in companies that have above-average growth opportunities and below-average valuations.
Della-Porta looks to identify catalysts that will help stocks outperform.
These consist of a number of different things including new product introduction, competitive valuations, and corporate restructuring.
If three of the catalysts he looks at indicate they will help the company move towards his price targets, then he buys the company. Price targets typically reflect a 20%-30% gain in a two-year period.
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