For most fund managers, 2014 was anticlimactic

John Kenchington

As we begin 2015, now is a good time to look back at last year’s overall returns and name all the winners and losers.

In investment terms 2014 was bizarre, with a number of sectors delivering oddball results.

The best-performing fund sector of all was UK Index-Linked Gilts, where funds delivered a remarkable average performance of 18.6 per cent in the discrete year, according to FE Analytics. Who could have predicted that?

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The linker funds beat even the mighty North America sector, where funds gained an average 17.8 per cent as the world’s biggest economy roared through its recovery.

Within that sector Fidelity found a run of top-decile performance, with its American Special Situations fund run by Angel Agudo gaining 26.6 per cent in the 2014 period, helping it to retain its long-term prowess.

But the champagne was definitely not popping over at the CF Greenwich fund, which somehow managed to lose 4.6 per cent, according to FE.

At the other end of the scale, investors in funds in the UK Smaller Companies sector had a very disappointing year, with an average loss of 1.6 per cent being delivered.

The first half of 2014 was actually strong for UK small-caps, but the gains were given up in the second half, bringing to an end a stellar few years for the sector.

European Smaller Companies funds lost slightly less money last year, perhaps surprisingly given the latest flare up of the eurozone economic crisis towards the end of the year. The only other sector to lose money last year was, unsurprisingly, Europe excluding UK.

But overall 2014 proved to be a damp squib for most, with the main UK growth fund sector delivering less than 1 per cent on average.

Poor Gerard Callahan had the worst time in the sector, with his Baillie Gifford UK Equity Alpha fund losing a woeful 12.5 per cent in the year.

The M&G Recovery fund run by Tom Dobell was also among the biggest losers, as his well-publicised run of poor form continued.

However, at the brighter end of the sector Mark Slater’s MFM Slater Recovery fund was top dog, delivering a gravity-defying 17.9 per cent return. Why is this fund still only £35m in size?

Mr Slater’s MFM Slater Growth fund came second in the sector, delivering 17.6 per cent, as his run of good form continues apace.

The question is whether Mr Slater will make the right calls as markets evolve and a rate rise looms in 2015, so we’ll be following this portfolio closely this year.

John Kenchington is editor of Investment Adviser