Investments  

The UK equity funds that weathered the 2021 storm

The UK equity funds that weathered the 2021 storm

Three Slater funds outperformed the FTSE 100 in 2021 as the wider sector failed to align with the global equity recovery.

The firm’s Artorius, Recovery and Growth funds all outperformed the index, which returned 14.3 per cent in the year to December 31 2021.

Slater’s Artorius fund outperformed the FTSE 100 by more than 25 percentage points in 2021, returning 39.4 per cent for the year.

Close behind was Consistent’s Opportunities Unit Trust, which posted a 32 per cent return. Slater’s Recovery fund was the third-best performer with a 31 per cent return.

Top performing UK equity funds in 2021

Fund 

Annual performance to December 31

Slater - Artorius

39.4%

Consistent - Opportunities Unit Trust 

32.1%

Slater - Recovery 

31.2%

Artemis - SmartGARP UK Equity 

30.8%

VT - Cape Wrath Focus 

30%

Slater - Growth 

29.2%

Allianz - UK Listed Opportunities 

28.7%

MI - Chelverton UK Equity Growth 

28.7%

Aviva Inv - UK Listed Equity High Alpha 

28.4%

T. Bailey Fund Services - Ocean UK Equity 

27.7%

Source: FE Fundinfo

Ben Yearsley, investment consultant at Fairview Investing, said 2021 was better for the UK after one of the biggest falls in GDP in 2020. 

"The vaccine strategy was the UK’s 'piece de resistance' which turbo charged growth earlier in the year, and also latterly with the booster campaign," he said.

"Despite this the UK stock market wasn’t as interested as it maybe should have been.

"Growth for the FTSE was great, but well behind the US despite having cheaper markets to start with.

"Will M&A come to the party for UK large caps in 2022?"

Although the FTSE 100 experienced a bounce on Christmas Eve, alongside a global stocks rally as reports emerged of the Omicron Covid variant delivering a less serious infection, the index struggled behind other global indices which all reached their pre-pandemic peaks in 2021. 

However the FTSE 100 index finished the year at 7,384, 3.78 per cent below the previous peak seen on January 17, 2020 before the pandemic caused panic in global equity markets.

In contrast, the S&P 500 reached its pre-pandemic peak in August 2020, and has since increased 41.31 per cent to 4,766 on the last day of trading in 2021.

The FTSE was held back by its relative underexposure to high-growth technology firms, in comparison to the US which has seen its equity markets hit record highs in the past year.

For example, Tesla’s share price rose 49.76 per cent last year, and Google parent Alphabet’s rose 65.17 per cent in the same period.

The FTSE is mainly dominated by more value oriented firms such as financial services, and mining and oil companies, which were stunted this year over rolling Covid fears.

sally.hickey@ft.com