A new year sees FEFI down 3.9%

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A new year sees FEFI down 3.9%

February 5, 2010

The FEFI fell 3.9% in January of 2010. Find out which funds contributed to the fall, and which funds held steady.

Author : iFAST Research & Content Team

Untitled Document

Chart 1: Year-to-date performance of the FEFI

iFAST compilations, as at 2 February 2010

FEFI Performance Review
The first month of 2010 saw markets correct. The FEFI, from 1506.06 points at the end of 2009, was down 3.9% to 1446.93 points (as at 2 February 2010).

As countries begin to withdraw from their stimulus, more volatility is expected in markets. China hiked the reserve ratio of banks on 12 January 2010 in a bid to rein in concerns over inflation. In the US, Barack Obama announced fiscal reforms, although concrete plans remain sketchy as at 2 February 2010.

The impact of such reforms, while positive in the long-term will likely see volatility increase and more corrections are likely in the short-term. Similarly, after a strong run up in 2009, investors may be taking some profit due to the healthy run up.

So which funds outperformed the FEFI, and which funds underperformed?

Table 1: FEFI Index Levels

FEFI

Year-to-date (%)

Month-to-date (%)

31-Dec-2009

1506.06

0.0%

28-Jan-2010

1446.93

-3.9%

Source: iFAST compilations, as at 2 February 2010, performances in the table are in SGD terms, calculated using bid-to-bid prices, with any income or dividend reinvested.

Top Funds January 2010

Table 2: Top 5 Equity Funds in January 2010
	Market / Sector	Return (year-to-date)	Return (month-to-date)
HGIF Thai Eqty Fd USD AD	Thailand	7.1%	7.1%
Fidelity Iberia EUR	Emerging Europe	3.3%	3.3%
Fidelity Italy EUR	Italy	2.8%	2.8%
Henderson Hzn Pan Europn Prop Eq-A2 EUR	Property	2.7%	2.7%
Aberdeen Indonesia Equity	Indonesia	2.6%	2.6%
Source: iFAST compilations, as at 2 February 2010

Against the down market Europe, Thailand and Indonesia returned positive performances, but only just barely. Leading with 7.1% is the HGIF Thai Equity Fund, which benefitted from investors seeking cheaper markets, as well as their overweight in financials.

The Fidelity Iberia fund invests primarily in Spanish and Portugese equities, and has the majority of its assets in Spain. The Fidelity Italy fund invests in Italian equities. Both funds returned positive performances thanks to substantial holdings in financials. Investors also found positive returns in the Henderson Horizon Pan European Property fund, which invests in property equities across Europe.

Outperforming the FEFI, the Aberdeen Indonesia Equity fund also moved up by 2.6% thanks to overweighting in consumer and infrastructure sectors.

Bottom Funds January 2010

Table 3: Bottom 5 Equity Funds in January 2010
	Market / Sector	Return (year-to-date)	Return (month-to-date)
FLF Eq Brazil USD	Brazil	-12.9%	-12.9%
FLF Eq Latin America USD	Latin America	-11.8%	-11.8%
FLF Eq Materials World EUR	Resources	-11.1%	-11.1%
DWS China Eqty Fund Cl A SGD	China	-10.4%	-10.4%
Fidelity S East Asia USD	Asia ex-Japan	-10.1%	-10.1%
Source: iFAST compilations, as at 2 February 2010

Latin America and Materials led the charge downwards. The Bovespa Index fell 6.79% YTD, as at 4 Febuary 2010. Correspondingly, funds with a Brazil emphasis followed.

The FLF Equity Brazil USD shed 12.9% while the FLF Equity Latin America USD fund fell 11.8%. Both funds had substantial investments into Brazil, which contributed to their fall. The FLF Equity Materials World EUR fund shed 11.1% with a large weighting in mining and metal companies. The DWS China Equity Fund also saw a 10% drop due to tightening measures from the Chinese government. The Fidelity Southeast Asia USD fund also saw a large drop due to its exposure to East Asia, in particular China, Korea and Taiwan.

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The Research & Content team is part of iFAST Financial Pte Ltd.

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