SECTOR EQUITY
SECTOR ANALYSIS
Three-year sector performance
Performance by thematic funds diverged
over the past three years. Top performing
sectors were healthcare and TMT, with
both delivering over 30% in US dollar terms.
Property funds with a core focus in Europe
also ranked among the top sectors. At the
bottom end, natural resources, energy and
commodity funds fell over 20% during the
period as energy and commodity prices
dropped. Elsewhere, financials, infrastructure
and consumer goods and services posted
8-12% returns over the period, broadly in line
with global equities.
MARKET REVIEW
Healthcare equities had a strong run over
the three-year period, with biotechnology
companies leading the gains as the pace of
innovation accelerated. Faster approvals
of new drugs in recent years along with
increasing M&A helped drive valuations
higher across the sector. Technology sector
equities also performed well, thanks in part
to the rapid shift to cloud-based services
and broader adoption of smartphones
and tablets. However, performance in the
hardware and equipment segment lagged.
The energy and commodity sectors were the
most significant underperformers.
MARKET OUTLOOK
Source: FE Analytics (31 Mar ’13 to 31 Mar ’16)
Against a backdrop of mild global growth, new
economy sectors including IT and healthcare
present better opportunities as these sectors
are committed to technological innovations
and R&D. With lower commodity prices, mild
inflation, stabilisation of the labour market
and along with the rising middle classes in
Asia, consumer sectors can expect to do
well. Old economy sectors such as energy,
commodity and industrial, however, are have
excess capacity issues. Financials can expect
to face challenges in the short-term due to
a tighter regulatory environment and mild
global growth.
Three-year annualised return/volatility
Provided by FE Advisory Asia as of 31 May ’16
Source: FE Analytics (31 Mar ’13 to 31 Mar ’16)
For professional investors only
Fund Selector Asia Fund Insights Directory 2016
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