The Chinese property sector, which makes up around a quarter of the country’s economy, has been a particular drag on returns over the last year. In January, one of the sector’s leading players, China Evergrande, entered into a forced liquidation.

This was seen in the month’s worst performing individual funds, with the £14.1m Redwheel China Equity, £203.3m Baillie Gifford China, and £5.8m JPM China all among the bottom 10 for returns. Climate strategies, such as Baillie Gifford Climate Optimism and Active Solar also struggled in January.

In contrast, IA North America and Technology were the two best-performing sectors, up 3% and 4.8% respectively.

Ben Yearsley, director at Fairview Investing, said. “These two are so intertwined that it does distort the picture of US equities. Microsoft is again the world’s largest company with a value just under $3trn. But with Apple, Alphabet and Amazon also in the top ten, a tech fund, a Nasdaq tracker, an S&P tracker and a MSCI World tracker look very similar and perform in tandem.”

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He added: “The positive equity stories of 2023 all continue with tech, India, and Japan all starting 2024 with a bang. Two of those areas look pretty expensive – then again they almost always do. Japan remains one of the most interesting stories with corporate change and more shareholder awareness helping drive markets. On the other side, China can’t seem to escape the doom loop – Beijing need a big bang to pull markets from historic lows.”

Yearsley pointed out that, for a brief period of time in January, markets regained some confidence after Beijing announced stimulus measures. However this confidence evaporated, with the Hang Seng index finishing the month down by more than 9%.

“Contrast that with Japan where the Topix put on almost 7% – the BoJ has kept the world’s last remaining negative interest rate policy and wants inflation. Despite the excellent returns from Japanese equities many fund managers are confident on future returns and thinking this is just the start of a sustained bull run. The FTSE had a lacklustre start to 2024 falling 1.27%.”

Oxeye Hedged Income was the top performing fund, returning 9.5% in January. Yearsley noted the fund has regularly topped and tailed the monthly performance tables over the past few years.

Jupiter’s India-focused offerings, Jupiter India and Jupiter India Select, both performed strongly by returning 8.7% and 8.3% respectively. The average IA India fund returned 1.8% over the month.

While the firm pointed out that geopolitical risk only increased last year, it said “there is always a good cohort of fund managers across asset classes” who are able to perform irrespective of how challenging the backdrop is.

Below, Square Mile’s team of fund analysts discuss nine funds they have a “good level of conviction” in for meeting their investment goals in 2024:

Polar Capital Global Insurance

The Polar Capital Global Insurance fund, which holds an AA rating in Square Mile’s Academy of Funds, typically holds 30 to 35 holdings mostly in medium-sized insurance companies. The fund aims to return 10% annually, and avoids investments in long-term liability claims as well as, for the most part, life insurers.

David Holder, senior investment research analyst for Square Mile, said: “We like the AA-rated Polar Global Insurance fund for several reasons, not least due to the proven investment approach of its lead manager, Nick Martin.

“It invests in a sleepy sub-sector of markets that is not widely covered, perceived as complex and which includes many firms of variable quality. Mr Martin has built a deep pool of company knowledge and is well informed in the intricacies of investing in this sector.”

Redwheel Global Emerging Markets

The Redwheel fund, which holds an A rating from Square Mile, aims to outperform the MSCI Emerging Markets index by 3% yearly over five-year periods. The long-term capital growth fund is run by manager John Molloy.

Amaya Assam, head of fund origination, said: “He has an impressive long-term track record and is supported by a diverse and experienced team of dedicated analysts.  Mr Molloy applies a well-constructed process which includes markets that are often overlooked by other investors, and he seeks to take advantage of these where they present attractive growth opportunities.”

Comgest Growth Europe Smaller Companies

The Comgest fund, which invests in 25 to 30 companies with a market cap of €1-€10bn, has an A rating from Square Mile.

“The team’s edge is its company analysis and an absolute return mindset with the strategy’s success measured by investee companies’ longer-term earnings capability,” Assam said.

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“The portfolio can have some sizeable positions at the stock, sector and country level which can be a double-edged sword at times, as the portfolio concentration can be beneficial when stock selection is working. However, it can also add to the fund’s volatility, which is already an inherent feature when investing in smaller companies.”

Liontrust Special Situations 

Anthony Cross and Julian Fosh’s Special Situations fund is marked with an AA rating and has 55 holdings, with a fund size of £3.9bn. Established in 2005, the fund has a low stock turnover and operates as a capital growth-oriented strategy.

Mark Hinton, equity fund research manager, said: “The team works in a highly collegiate manner and has complementary skill sets, and together its members apply a very well-considered and defined investment process.  This steers them towards relatively steady businesses that are gradually growing, generating high levels of cash and have a clear competitive edge.”

Man GLG Sterling Corporate Bond

While Square Mile said this ‘positive prospect’-rated bond fund can experience short-term volatility, it believes the fund is a good option for offering growth and income. The fund is managed by Jonathan Golan, who has a goal of extracting “100% of the fund’s performance aspirations through credit selection”, said Square Mile’s Eduardo Sánchez, the associate research director for fixed income, alternatives & multi-asset.

“Unlike many of its peer group, this fund’s edge lies in its bottom-up focus on smaller issuers and Mr Golan’s supporting team’s ability to extract excess returns from undervalued credits; many of which are overlooked by larger scale investors,” he said.

Wellington Global Impact Bond

The Article 9 fund from Wellington holds a Responsible AA rating from Square Mile and has $602.7m assets under management as of 9 January.

“Their impact investment process is well thought through, considering issuers against the materiality, the additionality and the measurability of their impact investment case,” Sánchez said.

“We believe that these considerations have created a very solid base on which the team has built a credible impact strategy while also aiming to provide above-market financial returns.”

Artemis US Smaller Companies

The AA-rated fund has 50-70 companies with a market cap ranging from $1bn to $10bn in US companies. Led by Cormac Weldon, the fund holds £748m assets under management and launched in 2014.

Ajay Vaid, investment research analyst, said: “He and his team believe that investors can be slow to price in the implications of change that can enable style-agnostic investors to outperform the market, regardless of market conditions.

“The team conducts considerable macroeconomic analysis in order to understand cyclical and secular trends, as well as the broader outlook for the US economy.”

WHEB Sustainability

The Responsible AA-rated WHEB fund invests in 40 to 60 responsible companies and holds £717.1m assets under management. Stocks fall under nine themes, including cleaner energy, sustainable transport, resource efficiency, environmental services, water management, well-being, health, safety and education, and must derive 50% of its revenue from these themes.

Charlie McCann, investment research analyst, said: “Collectively, they apply an investment process which sets a high hurdle for inclusion in the portfolio to keep the overall impact high.

“As a result of this process, and where the team tends to find suitable stock ideas, the fund is likely to have significant biases to areas of the market such as the healthcare and industrials sectors, and towards mid-capitalisation companies. Conversely, it is unlikely to have any meaningful exposure to the energy and financials sectors and has a notable underweight to the largest companies within its MSCI World benchmark.”

Ruffer Diversified Return

The Ruffer fund, which holds an A rating, is managed by Duncan MacInnes and Ian Rees, but asset allocation and investment themes are determined by Ruffer’s asset allocation committee which meets at least once a week. The fund balances out global equity investments with holdings including cash, conventional bonds, index-linked bonds, and various derivatives. As of the end of December, it held £1.9bn in AUM.

Alex Farlow, associate director of multi-asset research, said: “The exposure to options and other derivatives is primarily used to reduce directional equity market or interest rate risk when deemed appropriate.

“This sets this fund apart and has been particularly and consistently successful in protecting investors’ capital when it matters most. We note that performance has been disappointing in 2023, but we expect it to bounce back in 2024.”

This article was written for our sister title Portfolio Adviser

The firm also announced that client services executive Markus Mikkola will move from the London office to take up a role in the Stockholm office as regional sales executive for the Nordics.

Peter Leane, Polar Capital’s head of Nordic region, said: “We have worked hard to establish strong client relations in the Nordic region as illustrated by the demand for our funds from long-standing investors.

“The opening of our Stockholm office underscores the importance of the Nordics to Polar Capital and will enable us to further consolidate existing relations as well as to pursue new partnerships.”

Iain Evans, global head of distribution at Polar Capital, added: “Opening an office in Stockholm was the obvious next step for us and I am confident that we will continue to see sustained growth in the region.”

‘Highly sophisticated markets’

Mikkola will focus on providing clients with diversified investment solutions and exposure to global and thematic investment portfolios. His role will also include developing the firm’s presence regionally and engaging with local investors and wealth managers.

He commented: “The Nordic countries are highly sophisticated markets with high demand for bespoke investment products.”

Polar Capital started in 2001 and has offices in the US, Germany, Switzerland, France, Spain, Denmark, China and Singapore, as well as in London and Stockholm.

The investment boutique has appointed Irshaad Ahmad as chief executive.

He joined the firm in September 2022 as head of global distribution. Prior to Ardevora, Ahmad was chief investment officer of Canada Post Corporation’s pension fund.

Ahmad previously spent over four years at Allianz GI as managing director and head of institutional for Europe.

He succeeds Ardevora co-founder William Pattisson, who will focus solely on his role as portfolio manager.

Chartered Insurance Institute

The professional body has named Brian Caruth as interim vice president for local institutes.

Caruth is well versed in local institute matters, having served as a council member for the Insurance Institute of Northern Ireland (IINI) for over 30 years.

Evelyn Partners

The wealth management and professional services group has appointed Harrison Boar as a financial planner at its Chelmsford office.

Harrison joins Evelyn Partners from Fisher Investments, where he spent nine years as a private client adviser.

Boodle Hatfield

The law firm has strengthened its private client and tax department with the appointment of partner Nicola Bushby.

Bushby joins from Irwin Mitchell. She specialises in trust and estate litigation for individuals and families.

The Exit Partnership

The financial services M&A consultancy firm has hired Steve Mclean as a exit specialist.

He was the former head of operations at FS Legal.

Spring Capital Partners

The funds disributor has appointed Delphine Kadel as managing director for Germany and Austria, and Christian Nilsson as managing director for Nordics.

Kadel joins Spring Capital from Jupiter Asset Management, where for six years she worked with asset allocators as sales director, discretionary. She was most recently sales director for institutional clients.

Nilsson joins from William Blair IM, where he was head of Nordic distribution.

Polar Capital

The active asset management group has hired Jasper Wright as a fund manager in its Emerging Markets and Asia team.

Wright spent six years at Federated Hermes, where he was an associate director in the firm’s Global Emerging Markets Equity team.

Latitude Investment Management

The London-based firm has expanded its investment team with the appointment of Gabriel Hull as an analyst.

Hull started his career at Fidelity International as an equity analyst in the emerging markets team. He then spent three years as an investment analyst for Highclere International Investors, an affiliate of Silchester Partners Group.

Paradigm Norton Financial Planning

David Kelly has been appointed as a non-executive director at the firm.

Kelly is currently chief executive at Storm Consultancy.

The office will be the base for its sustainable thematic equity team, led by Thiemo Lang. The team joined Polar Capital in September 2021 and manages the Polar Capital Smart Energy Fund and Polar Capital Smart Mobility Fund, both of which are global equity portfolios investing in companies aiming to address sustainability challenges in the energy and transportation sectors, respectively.

Iain Evans, global head of distribution at Polar Capital, said: “We continue to broaden and deepen our presence and support in continental Europe and the Nordic region. Switzerland has always been and remains a core market for the firm and so opening an office there was a natural step for us. It is the ideal base for our sustainable thematic equity team and further enhances our presence in continental Europe.”

Lang, senior portfolio manager at Polar Capital, said: “It is very exciting to have opened an office in Zurich. It is the perfect base for us as a team, particularly given our client relationships in Switzerland and across Europe.

“Now more than ever is it important to increase investment into technological energy solutions and services that will help reduce the world’s carbon emissions, whilst improving energy security and driving down the costs of energy. With the global shift to a sustainable energy future set to gather more pace in the coming decades, this creates long-term opportunities for investors, and we look forward to tapping into this.”

This comes months after Polar Capital invested in digital wealth manager Moneybox, which bagged a total of £35m ($43.3m, €40m) in a Series D funding round in April 2022.