Gold funds shine amid market turmoil, Woodford woes continue

•    Gold leads the top performing funds in Q3
•    Woodford’s Equity Income fund is fourth worst performer
•    Lindsell Train hits worst performers, as share price plummets

Laura Suter, personal finance analyst at investment platform AJ Bell, comments:

“Market turmoil means that gold had its time to shine in the past three months, with gold funds dominating the top performers - making up six of the top performing funds over the past quarter. The price of gold has risen 4.4% to $1,473.85 per ounce in that time, boosting funds holding the physical metal and also miners. 

“The other sector to feature in the top performers is Japan, with two of the top funds. A trade deal between US and Japan was announced in September, which boosted stock markets. There has been talk of a Japanese revival for years, but there are now signs that Abenomics could be paying off with unemployment falling and GDP rising. The Topix rose around 4% over the three months, but has risen 134% since Shinzo Abe came into power.

“Investors trapped in Woodford’s Equity Income fund will be dismayed to see they have moved up the worst-performers, with the fund being the fourth worst performer in the past three months with a near 12% loss. It’s now four months since the fund closed and investors are still looking down the barrel of another two months locked in. Woodford’s Patient Capital trust narrowly missed making the worst performers, with a near 20% loss over the three months, while Woodford Income Focus notched up a 5% loss.

“The Garraway Absolute Equity fund is being liquidated, after the transfer from City Financial to Garraway failed to revive the fund, hence its dismal return figures. The £78m Miton UK Smaller Companies fund also notched up a 13% loss over the quarter, taking the total losses over the past year to near 29%. The fund has almost 80% of its assets in AIM markets, meaning it can be volatile at times, as well as being hit by general sour sentiment on UK equities.

“A rare addition to the worst performers comes from Nick Train, with the Lindsell Train trust falling by 24% over the three months. The trust had been trading at a sometimes eye-watering premium to its net asset value – a premium that Train himself warned wasn’t sustainable. That has corrected in the past few months, although it still sits at a 26% premium – the highest in its sector.”

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