Equity funds faring well despite FTSE 100 fall

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Equity funds faring well despite FTSE 100 fall

UK growth and equity income funds have performed well this year, despite the FTSE 100 falling by nearly 4 per cent over the year, Richard Troue has said.

The head of investment analysis at Hargreaves Lansdown said the fall is a short-term stock market fluctuation and needed to be put in context.

Mr Troue said: “Actively managed UK growth and equity income funds have, on average, performed better than the headline stock market.

“Look beyond the largest companies in the market, and the picture improves further still. Smaller and medium-sized companies are more exposed to the domestic economy, which has remained robust.

“These companies have performed better than larger counterparts this year, and investors who have diversified outside of the largest companies are also likely to have fared well.”

31 December 2014 – 10 December 2015
FTSE 100-3.8%
FTSE 2508.89%
FTSE Small Cap6.65%
IA UK All Companies2.21%
IA UK Equity Income3.24%

Adviser view

Andrew Whiteley, a financial adviser with Hertfordshire-based Provisio Chartered Financial Planners, said: “We generally take a passive approach, so we have got exposure to the FTSE 100 and they have always been in our portfolio to some degree.

“What we have tried to do is look at alternatives to the cap-weighted index and that has paid off over the last 12 months.”