* Seven of 10 worst performers Europe or UK-focused in
* German funds 3 of 10
* Gold, precious metal equity funds buck the trend
By Thomas Reggiori Wilkes and Christopher Vellacott
LONDON, Sept 9
A sharp sell-off in European equities last month extended to
funds invested in Germany, the continent's economic powerhouse
and often seen as a relative safe haven, with German funds
propping up the bottom of the table, Lipper data showed.
Worries Germany may have to pick up the tab for the euro
zone debt crisis, alongside selling of the country's many
cyclical stocks, meant three of the 10 worst-performers were
German funds, according to the data, which tracks 3,000-plus
equity funds registered for sale in Britain.
Jyske Invest's German Equities fund fell 19.66 percent,
while the MainFirst -- Germany Fund dropped 18.85 and Fidelity
Funds -- Germany lost 18.22 percent.
Reflecting the broad nature of the slump in European stock
markets in August, the two worst performers were the RBC Global
Continental Europe fund, down 22.40 percent, and GLG's UK Select
Equity Fund, narrowly ahead with a 22.23 percent drop.
"Car companies, chemical companies and finance. That is
basically the German market and if you look at the sector
returns they will be the worst sectors in August. So, the market
is hurting a bit because of that," Per Kongsgaard, manager of
the Jyske Invest fund, told Reuters.
"If there is continued trouble in southern Europe,
eventually the bill will go to Germany... and (it) will have to
make cutbacks," Kongsgaard said.
The DAX FDXc1 has dropped around 24 percent in 2011, in
line with a 25 percent drop in the pan-European Euro STOXX 50
While funds invested in southern Europe have been hit hard
for much of 2011 as the region grapples with a debt crisis,
public spending cuts and anaemic growth, some European managers
had hoped their portfolios would benefit from exposure to the
perceived safety of northern Europe.
German exporters who sell to Asia are often viewed as
companies with less to lose from Europe's debt crisis.
Oliver Maslowski, portfolio manager for the Julius Baer EF
German Value Fund, which fell 16.11 percent in August, said the
sell-off in German stocks was overdone and company earnings
revisions had so far been small.
"People drew the conclusion that this situation looks
exactly like 2008 ... We are pricing in a recession scenario but
up until now most of the companies I talk to do not see such a
scenario," he said, adding no investors redeemed money from his
funds in August.
"If you believe in the Asian growth story but do not want
direct exposure to the Asian markets you should buy Germany
because you are buying Asia with a discount."
GOLD FUNDS BOUNCE BACK
In a tough month for most equity fund sectors, those focused
on precious metal companies stood out as strong performers as an
investor flight to safety sent the gold price to a record high.
Nine of the 10 best-performing funds in August invested in
gold and precious metal equities, according to the Lipper data.
The RBS Market Access NYSE Arca Gold BUGS Index Fund was the
biggest gainer, putting on 9.90 percent, while the Investec GSF
Global Gold fund rose 7.60 percent and BlackRock's World Gold
Fund, run by star manager Evy Hambro, grew 7.42 percent.
(Reporting by Tommy Wilkes and Chris Vellacott; Editing by Dan