The bond market dominated investment performance last year by returns, with eight of the top 10 categories for calendar 2011 being fixed-income focused, according to Morningstar data. But equity was at the other end of the scale, accounting for eight of the bottom 10 categories.

GBP government bonds led the way last year with an annual return of 14.68%, followed by USD inflation-linked bonds at 11.09% -- the only two categories to make it into double figures.

Also beating the 5% return mark for 2011 were GBP diversified bonds (8.90%), JPY bonds (5.98%), USD diversified bonds (5.50%), and USD government bonds (5.44%).

HKD bonds also made it into the top 10 with a 4.49% positive performance, along with indirect North America property (4.27%) and AUD money market (3.70%). Global Bond - Other Hedged recorded 3.47% and completed the top 10.

In terms of the worst performance by category, India equity led the way with -35.15%, closely followed by TWD aggressive allocation (-34.23%).

Emerging markets then dominated the bottom 10, with Turkey equity (-32.88%), Russia equity (-29.55%), emerging Europe ex-Russia equity (-29.52%) and emerging Europe equity (-29.51%) all sinking.

Bringing up the rear in the bottom 10 was Bric equity (-26.73%), Emea equity (-24.74%) and Brazil equity (-24.19%).

Winners and losers
Drilling down further into investment performance, the best performing fund of 2011 was BNP Paribas Plan Target Click Fund (USD) 2035 A, a target-date product that returned 16% in 2011.

In fact, BNP Paribas saw two similar funds with shorter durations also rank in the top 10, the others being BNPP Plan Target Click Fund (USD) 2030, which returned 13.59% and finished fifth; and the BNPP Plan Target Click Fund (2025), which returned 13.21% for sixth spot.

The second best performing fund of 2011 by Morningstar numbers was Invesco Gilt Fund A, a GBP government bond fund that returned 15%. That was followed in third place by First State Long Term Bond Fund III, a USD government bond product that returned 14.98%.

Finishing fourth was Threadneedle Sterling Bond Retail Gross Acc fund (14.41%); in seventh was the Manulife Global Fund US Treasury Inflation-Protected Securities AA Inc (13%); eighth was BNY Mellon Sterling Bond A GBP Acc (12.91%); ninth was MFS Meridian Funds Inflation Adjusted Bond Fund A2 USD Inc (12.43%); and 10th was Legg Mason Western Asset Inflation Management Fund A Distr (A) USD (12.28%).

Of the 10 worst performing funds of 2011, a dominant six were focused on India equity, therein vastly underperforming the benchmark Sensex index, which fell 25% last year.

Winning the unwanted accolade of worst performing fund for 2011 was CCB International with its China Policy Driven Fd Acc, a China equity fund that sank -48.07%.

The India show then follows, with Standard Life Investments Global SICAV Indian Equities A, which returned -47.43% last year; HSBC Global Investment Funds Indian Equity A Inc, third worst overall with -45.82%; Amundi Funds Equity India Infrastructure - AU  (C), which returned -44.51% and was fourth worst; JF India Smaller Companies, fifth worst at -43.07; Pictet-Indian Equities-P USD, eighth worst at -41.46%; and LG India Fund Inc, ninth worst with -40.32%.

The China equity-focused Lyxor China A/H Shares Opportunities Acc was sixth worst last year with -42.23%, while two emerging markets equity focused funds complete the worst 10.

The Templeton Eastern Europe A Acc (euros) recorded -41.95% last year to finish seventh worst, and the AXA WF Framlington Emerging Markets Talents A-Cap USD returned -40.17 and finished 10th worst. 

All the above data was provided by Morningstar.