Morningstar Asia released its quarterly review of fund performance for funds domiciled in Europe and Asia. All performance averages are based on Morningstar Europe and Asia fund categories and are quoted in USD unless otherwise stated.
Highlights of first-quarter 2009 fund performance include:
• Selected higher-risk areas began to outperform: high-yield bond funds, small-cap equity funds, and Russia and Latin America funds all fared better than the norm.
• Among specialty funds, top performers were those in the Morningstar Sector Equity Precious Metals category, followed by Sector Equity Technology and Sector Equity Industrial Materials. Funds focused on financials, property, and utilities fared worst.
• The industry continued to contract: The number of fund classes liquidated or merged increased morethan 60% year on year; and merger and acquisition activity among fund houses continued to heat up,creating risks for fund investors.
The first quarter of 2009 was a difficult one, but there were some marked shifts from trends in 2008. Most notably, investors with a measured appetite for risk did well. Energy and mining shares firmed up, leading to strong performance from key emerging markets such as Russia and Latin America. The Morningstar Norway Equity category also benefitted from that market's high degree of energy exposure and beat all other developed Europe equity categories. High-yield bonds and small- and mid-cap funds performed well, as did the technology sector.
