The best and worst funds over a year of lockdown

The best and worst funds over a year of lockdown

In a year like no other, risk asset performance often looked remarkably disconnected from goings-on in the real world.


All advisers will know that, as the old saying goes, the stock market is not the economy – but there were times when it felt like the two were moving in opposite directions entirely.

In that context, it should come as little surprise to see that the market lows for many equity indices, including those in the UK, were reached on March 23 – the same day the UK went into full lockdown for the first time.

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Buoyed by at first by central bank support and then by economic recovery hopes, investment markets found the subsequent 12 months to be surprisingly plain sailing. The rally proved rapid and, with the benefit of hindsight, prolonged.

Indeed, more than 60 equity funds in the Investment Association’s investment universe have more than doubled holders' money over the past year. Their specific investment focuses span a number of regions and specialisms, but there is a degree of commonality among some of the absolute best offerings.

On the other side of the ledger, the very worst performer will be depressingly familiar to almost all advisers. Yet outside of that portfolio, just one fund has lost 15 per cent or more over the past 12 months - emphasising just how fortunate investors have been over the period.

All the same, three more recent strugglers, detailed below, might be a sign of tougher times to come for parts of advisers' portfolios.

Below are the five best and five worst portfolios in the year to March 22. All data is from FE, based on funds open to all advisers, and returns accrued by a sterling investor.

Top funds

Premier Miton UK Smaller Companies 192.3%

Until recently, conventional UK equity indices had failed to keep up with peers over the past 12 months. But some smaller company strategies have flourished, taking advantage first of the rebound in risk assets seen in the second quarter of 2020, then of investors’ emerging belief in economic recovery. That said, the Premier Miton fund, run by Gervais Williams and Martin Turner, is more than 70 percentage points ahead of any other UK small-cap strategy over the period in question.

MFM Junior Gold 160.5%

It’s been a different kind of year for the tiny Junior Gold portfolio, which buys gold mining shares. Those companies rallied faster than almost every other asset last spring, meaning the fund made a 175 per cent gain from the March lows in just four months. Since then, however, the gold price has started to stutter, and so too have the fortunes of precious metal miners.

Legg Mason Royce US Small Cap Opportunity 147.4%

Of all the smaller companies sectors worldwide, it’s US small-caps that have taken off the most in recent months. Investors have rotated away from tech names, but have remained eager to take advantage of the new US administration’s fiscal stimulus plans. The rise of the US retail investor has also been of particular benefit to smaller companies.