Woodford tops list of best performing equity funds since Brexit

Woodford tops list of best performing equity funds since Brexit

The Woodford Equity Income fund, run by one of the most prominent names in the fund management industry, has delivered the best returns of all the UK equity funds since the EU referendum, according to figures from rating firm Fund Calibre.

Neil Woodford’s £9.4bn fund returned more than 12 per cent over the period, despite the Brexit vote sending shockwaves across the UK market.

The £934m Evenlode Income followed closely behind Mr Woodford’s fund, returning 11.9 per cent since 23 June, while the R&M UK Equity Long Term Recovery was in third place, returning 11.1 per cent. 

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The FTSE All Share index returned over 8.1 per cent over the same period.

But it was the UK smaller companies sector which took the biggest hit after the referendum, with the FTSE Smaller Companies index falling 10.3 per cent in just two working days, and taking just over a month to recover.

But Darius McDermott, managing director of FundCalibre, said the small cap sector still surprised many with its resilience.

Meanwhile, the FTSE 100 suffered a 5.6 per cent loss in value, but was back in positive territory in less than a week.

Mr McDermott, who is also managing director of Chelsea Financial Services, said many fund managers are starting to suggest the "easy money" has now been made out of the Brexit bounce. 

He said there is now a sense of caution, as many managers fear the downside risks are yet to come through as the UK starts processing its exit from the European Union.

“For this reason, I would suggest that now is not the time to buy a market tracker," he said. "The recent surge is making the indices look expensive and you risk buying right as we are on the cusp of renewed volatility." 

“Instead, I’d recommend a few carefully chosen active funds, whose managers will be looking to exploit this volatility, rather than simply being taken for the ride.”

Looking at the UK stock market as a whole, Mr McDermott said it has been “remarkably resilient” in the past few months, helped by actions from the Bank of England.

When it comes to sectors, Hargreaves Lansdown pointed out that property funds have fared the worst in the three months since the Brexit vote.

The commercial property market fell by 2.3 per cent over the period, which Laith Khalaf, senior analyst at Hargreaves Lansdown, said was not great, but not as bad as the turmoil in the commercial property funds sector might have suggested.

“The share prices of banks, airlines and property funds have all been burned by Brexit, while companies with international revenue streams have enjoyed a Brexit boost."

Mr Khalaf said it is still very early days in the process of Brexit, adding there is no doubt there are more thrills and spills to come.

"So far economic data has held up relatively well since the vote, but it may be we are still waiting for the aftershocks to register."