The Baillie Gifford American fund was the best performing portfolio of 2020, a fund which represents the winning themes of the year — tech, the US and Baillie Gifford itself.
Data from FE Analytics showed the fund returned 122 per cent from January 1 to December 31 last year, bagging the top spot in the Investment Association universe.
It was closely followed by Morgan Stanley’s US Growth fund, which provided a 110 per cent return, and the 98 per cent returned by the LF Access Long Term Global Growth portfolio.
Other portfolios in Baillie Gifford’s range completed the top five performers, with its Long Term Global Growth (96 per cent) and its Positive Change (80 per cent) featuring among the best funds.
| Top 10 funds of 2020 | Return (%) |
| Baillie Gifford American | 121.84 |
| Morgan Stanley US Growth | 110.43 |
| LF Access Long Term Global Growth | 97.7 |
| Baillie Gifford Long Term Global Growth | 95.62 |
| Baillie Gifford Positive Change | 80.08 |
| Guinness Sustainable Energy | 79.29 |
| Premier Miton UK Smaller Companies | 77.33 |
| Baillie Gifford Global Discovery | 76.8 |
| MFM Junior Gold | 72.47 |
| Matthews China Smaller Companies | 72.22 |
Technology companies saw their share prices soar last year as the pandemic forced swathes of workers to set up home offices and families and friends to catch up over video.
As the majority of such technology ‘growth’ firms are based in the US, US-centred funds performed particularly well amid the pandemic.
Ben Yearsley, investment consultant at Fairview Investing, said: “It won’t surprise too many to hear that the Technology & Telecoms sector was the top performing in 2020.
“Lockdown winners, working from home, being entertained at home, anything linked into spending your entire life at home probably had a good year.”
But it was not all about the US. UK smaller companies, gold and China all appeared in the top 10 alongside two sustainable funds.
Looking more widely, Asia dominated the best performing sectors of 2020.
| Top 5 sectors of 2020 | Return (%) |
| Technology & Telecoms | 44.52 |
| China/Greater China | 33.43 |
| Asia Pacific inc Japan | 27.21 |
| North American Smaller Companies | 23.74 |
| Asia Pacific ex Japan | 20.02 |
China’s market has been particularly resilient to the coronavirus crisis, returning 33 per cent this year, while both Asia Pacific sectors appeared in the top five.
Mr Yearsley said: “Asia generally has had a good crisis with much lower cases of Covid-19 than many Western countries and, of course, starting with much lower levels of debt.
“The slight surprise was that despite the US market hitting new highs and US companies dominating, the US fund sector was off the pace. Does this indicate how only a narrow set of companies had driven the US market in 2020?”
At the foot of the sector table was the UK, accounting for four of the five worst performing sectors and only relieved of the full house by the IA Property sector, which itself is overweight in the UK.
Hit by the perfect storm of a looming Brexit, a dividend drought and the country’s poor handling of the coronavirus crisis, the UK struggled to recoup its initial March losses last year.
The FTSE 100 recorded the worst performance in a decade, falling nearly 12 per cent over the year, while the MSCI World index rose 13 per cent, the S&P 500 gained 18 per cent and even the Euro STOXX ended on a positive figure (0.82 per cent).
| Bottom 5 sectors of 2020 | Return (%) |
| UK Equity Income | -10.66 |
| UK Equity & Bond Income | -8.26 |
| Property Other | -7.29 |
| UK All Companies | -5.99 |
| UK Direct Property | -3.59 |
Mr Yearsley said: “It is no surprise to see the UK Equity Income sector propping up the universe.
“It’s been a truly dire year, however with many companies returning to the dividend roster 2021 should see fortunes reversed.”
When it came to funds, those exposed to the oil market — such as energy portfolios or Latin American funds — fared worst.
The price of oil tanked at various points in 2020 as global demand dwindled amid the crisis.
Brent Crude Oil, the industry standard, averaged $43 a barrel in 2020 — down a third from the $64 a barrel in 2019. At one point, prices turned negative as demand fell flat and oil storage facilities were full.
Guinness Asset Management’s global energy funds, a pair of long-only energy funds offering direct exposure to the conventional energy sector, were the worst performers, both losing 36 per cent.
Schroders and BlackRock’s equivalent funds also feature among the worst performers, while Brown Advisory’s Latin America fund completed the bottom five.
| Bottom 5 funds of 2020 | Return (%) |
| Guinness Global Energy | -35.95 |
| TB Guinness Global Energy | -35.68 |
| Schroder ISF Global Energy | -33.62 |
| Blackrock GF World Energy | -30.19 |
| Brown Advisory Latin America | -28.95 |
A spokesperson from Guinness Asset Management said: “Covid represented the largest external shock to world oil demand that we have seen in many, many years and despite significant efforts from Opec the impact was significantly negative on the sector.
“No conventional energy companies were immune. 2020 was a particularly negative year for energy company share prices and the funds performed broadly in line with their long run historical relationship to the index.
"We continue to run the fund in the same manner, positioning it to benefit from an improving conventional energy macro environment.”
Schroders, BlackRock and Brown Advisory were approached for comment.
imogen.tew@ft.com
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