Investments  

The top performing UK equity funds this year

The top performing UK equity funds this year
(Luke MacGregor/Bloomberg)

The first six months of 2022 have proved a rollercoaster for active fund managers in UK equities.

At the start of the year, JO Hambro Capital Management re-opened two of its UK funds to new investors due to a positive outlook for UK equities, and Nick Train spoke of the “hugely encouraging” opportunities for investment in the UK equity market.

In the 29 weeks inbetween, inflation has set unpleasant records, rising above 5 per cent each month, and the Bank of England has hiked the base rate of interest at each of its four monetary policy meetings so far this year.

Despite this, the UK equity markets have not seen crashes at the level of their US or European counterparts.

The FTSE All-Share lost 7.8 per cent in the year to date to June 21, compared with the S&P 500 which has crashed 21.5 per cent and the 17 per cent drop experienced by the Dax in the same period.

The best performing UK funds were those primarily with exposure to UK large caps, with the majority of mid and small-cap funds seeing double digit losses.

M&G's UK Listed Mid-Cap Equity Fund, for example, lost 20 per cent in the period, and Liontrust's UK Micro Cap lost 16 per cent.

Top UK equity funds 

Name

Sector

Size

Return to June 21

Invesco UK Equity/UK Opportunities 

UK Large-Cap Equity

£70mn/£1bn

5.48%/5.03%

Abrdn UK High Income Equity 

UK Equity Income

£323mn

4.58%

Vanguard FTSE UK Equity Income Index

UK Equity Income

£1.2bn

4.39%

Jupiter UK Special Situations

UK Large-Cap Equity

£2bn

4.20%

Jupiter Income Trust 

UK Equity Income

£1.3bn

3.91%

UBS UK Equity Income 

UK Equity Income

£290mn

3.86%

L&G UK Equity Income 

UK Equity Income

£233mn

3.42%

TM CRUX UK Core Fund 

UK Large-Cap Equity

£49mn

3.16%

SUTL Cazenove Charity Equity IncomeUK Equity Income£38mn2.83%
BNY Mellon Equity IncomeUK Equity Income£122mn2.69%
Source: Morningstar

The top 15 funds were split evenly between large cap and equity income funds.

Three of Invesco's funds were in the top ten, with its UK Equity and UK Opportunity funds in the top three. Both funds are run by the company's head of UK equities, Martin Walker, and have similar exposures to energy, financials and industrials.

Invesco's UK strategy exposures

 UK Equity Fund

UK Opportunities Fund

BP7.60%7.80%
Shell7.40%7.50%
AstraZeneca6.80%5.28%
BAE Systems5.20%4.60%
Glencore4.80%4.10%
Source: Invesco

Indexes performed well, with Invesco's FTSE 100 ETF returning 5.2 per cent over the period, and VT Munro's Smart Beta UK Fund, which replicated the freedom smart-beta UK dividend index, returning 3 per cent.

Two equity income funds were in the top five, Abrdn’s UK High Income Equity and Vanguard’s FTSE UK Equity Income Index, which returned 4.58 per cent and 4.39 per cent respectively.

Despite experiencing strong outflows, Jupiter’s UK Special Situations and Income Trust funds were in the top ten of performers. The funds returned 4.2 per cent and 3.9 per cent.

sally.hickey@ft.com