Investments  

The best and worst performing funds amid market chaos

The best and worst performing funds amid market chaos

A tiny £20m fund has outperformed every other portfolio in the Investment Association universe over the past month, returning 13.8 per cent against a backdrop of falling markets and a spreading pandemic.

Winton Capital Management’s Winton Trend USD fund is the absolute best performer since February 24 and has returned 17.35 per cent over the past year, according to FE Analytics.

Other top performers include private US investment manager Neuberger Berman, whose Uncorrelated Strategies and Diversified Currency funds both made it into the top 10, while Aberdeen Standard Investments’ Strategic Investment Allocation fund made the top three.

The FTSE 100 dropped 27.4 per cent over this time period while the FTSE World tumbled by 25 per cent.

Only 151 of the 4,037 funds in the Investment Association universe posted positive returns over this period of market turmoil - just 3.7 per cent.

Top 10 performers 24.02 - 23.03
FundPerformance
Winton Trend USD13.81%
Neuberger Berman Uncorrelated Strategies13.64%
ASI Strategic Investment Allocation11.90%
Aviva Asia Pacific Property11.11%
MFS Meridian US Govt Bond10.15%
Argonaut Absolute Return10.01%
iShares Overseas Govt Bond Index (UK)9.17%
Neuberger Berman Diversified Currency9.08%
Threadneedle Aquila Life Overseas9.07%
Wellington Global Total Return8.79%

Source: FE Analytics

Tom Sparke, investment manager at GDIM, said: “The ‘winners’ list is populated by alternative strategies that do not have typical allocations, which is why they have avoided the falls in equity markets.  

“Some US treasury-heavy funds are in there, due to their rallying performance over the last four weeks.”

Ben Yearsley, investment consultant at Fairview Investing, said overseas investments had been helped by the dollar going up compared to sterling, while long government bonds had appeared which was “basically a flight to quality”.

Markets have suffered over the past few months as the Covid-19 pandemic has shut down borders, closed businesses and cancelled major gatherings.

Investments have also struggled against an oil price decline which has seen the price of Brent Crude Oil fall by 62 per cent since the start of 2020. Over the past month, the oil price has dropped about 56 per cent.

The oil price decline came as Russia broke its partnership with Opec, prompting Saudi Arabia to launch an aggressive price war targeting the rival producer.

Most of the worst-performing funds over the past month had been hit by these falling prices.

Bottom 10 performers 24.02 - 23.03
FundPerformance
Schroder ISF Global Energy-54.51%
MFM Junior Oils Trust-49.54%
Aberforth UK Small Companies-47.91%
Guinness Global Energy-45.91%
ASI UK Recovery Equity-45.63%
MFS Meridian Global Energy-43.69%
Janus Henderson Latin American-43.36%
Barclays UK Lower Cap-42.11%
Liontrust Latin America-41.88%
Elite Webb Capital Smaller Companies Income & Growth-41.62%

Source: FE Analytics

Adrian Lowcock, head of personal investing at Willis Owen, said the trend was expected.

He added: “Oil and energy stocks have been hit hard and therefore so have the funds with large exposure to those sectors. This is because the energy industry is facing attacks from either side.

“First you have the impact of the coronavirus on the demand for energy and in particular oil. The second issue is a price war between Russia and Opec, led by Saudi Arabia. 

“Normally either of these events would be enough to hit the energy sector but a combination of oversupply and disappearing demand are unprecedented.”

Jason Hollands, managing director at Tilney, agreed. He said: “There’s a clear story in the worst performers: the brutal impact on the oil and commodities sectors in the market rout, which is also reflected in the inclusion of a couple of Latin America funds that have large mining and oil positions.”

All 10 investment managers in the worst performing table were approached for comment.