Managers and their crystal balls one year on

The notable success story of the past 12 months has of course been property, with the IPD UK Property index gaining just under 17 per cent.

Calling it right last year was the Henderson Global Investors property team. Co-manager Ainslie McLennan told us last August she thought valuations were appealing, prompting us to ask whether property might be “on its way back up”.

The overall industry consensus was flawed in one important regard 12 months ago

Well done too to Legal & General multi-asset manager Justin Onuekwusi, who last October told us he was selling gilts and buying property. A good call.

Another winner has been China, which continues to refute cynics’ fears that unchecked lending in its shadow banking sector will ultimately lead to another sharp bear market.

Among the China bears has been First State’s Angus Tulloch, who last August told us he was still underweight the Chinese market.

However, improving flash PMI data, support programmes for banks and aggressive monetary support seem to keep saving the day, with the MSCI China index gaining 7.9 per cent in the past year.

A major winner of the past 12 months was also India, whose stockmarket gained 24.3 per cent thanks to a spectacular rise in May due to the appointment of reforming prime minister Narendra Modi.

The big loser of the past year was Russia. Vladimir Putin’s provocative political moves have led to sweeping sanctions from the US and Europe, leading to the MSCI Russia index losing 14.4 per cent in the past year.

This was unfortunate for Neptune’s Robin Geffen, who has long had an affinity with Russia and last November told us he had a large Russian weighting in his emerging markets fund.

But the fund’s 2.1 per cent loss in the past year ranks it among the worst performers in the sector.

The overall industry consensus was flawed in one important regard 12 months ago.

In mid-August the latest Bank of America Merrill Lynch Fund Manager Survey found confidence towards the eurozone had reached a nine-year high amid signs the eurozone’s burgeoning recovery was getting into its stride.

But Europe has delivered very little to reward this faith, with the FTSE Europe ex UK index mustering a limp 0.9 per cent gain in the past 12 months amid ongoing economic uncertainty.

Luckily for the industry’s fund managers, a few weeks later on September 23 we prominently reported that the eurozone’s problems were likely to resurface, citing experts Fidelity’s Paras Anand and Philip Poole at HSBC.

John Kenchington is editor of Investment Adviser