Strong rebound in July as both MSCI AC World index and global bonds gain

FINANCIAL markets rebounded strongly in July, with the MSCI AC World index gaining 1.9 per cent while global bonds saw returns of 2.1 per cent. The portfolio rose 1.6 per cent over the month, keeping pace with its simple benchmark of 70/30 global equities and global bonds.

Its performance, however, was hurt by some underperforming products. The Fidelity America A USD has continued to underperform and warrants a re-evaluation. The First State Asian Growth's underperformance against its benchmark and its peer group is not entirely unexpected as the fund historically tends to lag in periods of strong equity market performance. As for the United Emerging Market Bond fund, while its credit selection has not been an issue, the fund manager's bullish view on the US$ has materially impaired its performance.

The best performing funds over the month were the JPMorgan Funds - Latin America Equity fund which surged 6.4 per cent on the back of easing political turmoil in Brazil and the Fidelity Emerging Europe, Middle East and Africa Fund which gained 4.5 per cent as oil prices rocketed in July. (All returns are as of Aug 3 in S$ terms, except for global bonds in US$.)