50 days of lockdown – how have investors fared?


We’re now 50 days into lockdown in the UK, and although for many of us it will feel like day 500, there has been some more positive news for investors during that time. Following the bloodbath during the early part of March, markets have recovered some of the ground they lost, the vast majority of funds have delivered positive returns for investors, people have been buying more investments, and many companies have managed to raise cash.

The dark cloud hanging over investors during this time was the axe taken to billions of pounds of dividends, as businesses looked to conserve cash and slash payouts. So as we look forward to the gradual easing of lockdown, what has the first 50 days meant for investors?

All major markets rose in lockdown*

All major markets have risen since lockdown began on 23 March, showing that despite the global uncertainty and reduced spending in the economy, the market at least thinks a lot of that is already priced in. The lockdown period was preceded by mass falls in markets and since 23 March these indices have generally rebounded. The smallest UK companies rose the most, with the FTSE AIM All Share increasing by 37% during the period, while the FTSE 250 rose by a slightly lower 25% and the FTSE 100 index climbed 19%. In the FTSE 100 index six companies saw their share prices fall during the 50 days of lockdown, while in the FTSE 350 just 25 companies delivered an investment loss.

Stateside companies climbed higher, with the S&P 500 index recording a 31% rise in the lockdown period despite death figures from Coronavirus climbing ever higher in the country. Even Asian markets rose, although by lower amounts, with Hong Kong’s Hang Seng index rising 12% and China’s SSE Composite inching forward 9%, as concerns about the country’s ability to rebound prevail.

But dividends everywhere were axed

A total of 289 dividends were cut or deferred during lockdown, totalling £28.3bn of payouts that won’t be making their way to investors’ pockets. This included 41 FTSE 100 companies, leaving a large hole in income investors’ future payouts. Some equity income managers have predicted cuts to payouts from funds hitting 40% or more, with limited options left for income-seekers.

The banking giants make up the largest cuts, with over £5bn of dividends cut at HSBC, £1.6bn at Lloyds and just over £1bn at Barclays. Royal Dutch Shell’s near £2bn dividend cut is among the largest and was one of the biggest shocks for investors’ portfolios.

Largest dividend cuts during lockdown:

Date announced Company Value of dividend cut (£M)
31-Mar-20 HSBC £3,457
07-May-20 BT £3,348
31-Mar-20 Glencore £2,126
30-Apr-20 Royal Dutch Shell £1,979
28-Apr-20 HSBC (2) £1,627
31-Mar-20 Lloyds £1,576
31-Mar-20 Barclays £1,039
31-Mar-20 Royal Bank of Scotland £968
08-Apr-20 Aviva £839
Total £16,959

Source: Company account

Which funds were winners and losers?

During the 50 days of lockdown there was some polarised performance among funds, but investors will find cheer that 98% of funds have made money for investors during that time** – a sharp turnaround on the performance we saw just weeks before lockdown officially began when markets were in freefall. Gold funds topped the best performers during the period with ES Gold and Precious Metals delivering the highest return of 55.7%, as investors look to turn to gold in times of trouble, pushing up prices.

Technology funds have been another standout – as this crisis has seen how technology has become integral to our everyday lives. Whether it’s through various video conferencing services allowing us to work and socialise, Netflix entertaining us with binge-worthy TV or Amazon delivering goods and stopping us having to go to the shops, these technology companies have prospered as they have become essential services for many. US-focused funds have also been among the top risers, fuelled in part by this technology boom but also by the sharp rebound in American markets after falls in February and early March.

On the flip side, the 81 funds that have delivered a loss are dominated by property funds. The property market has all but ground to a halt during lockdown, meaning it’s almost impossible to accurately price the asset as no sales are happening. While lots of property funds remain suspended, meaning investors are trapped, that hasn’t stopped their values falling as managers write down the value of some assets. However, the worst performer in the lockdown period was Neil Woodford’s former fund, now called LF Equity Income, which lost investors 16.7%. The illiquid and unlisted assets in the fund will likely have been hit by the wider market downturns, but this fall in value really reflects the fact that investors received some of their money back on 25 March after assets were sold off so isn’t a true reflection of performance.

Best performing funds

Fund Performance (%)
ES - Gold and Precious Metals 55.71
Ninety One - Global Gold  54.13
BlackRock - Gold & General 53.81
MFM - Junior Gold  52.84
Quilter Investors - Precious Metals Equity 50.71
Baillie Gifford - American 49.08
Morgan Stanley - US Growth  48.75
Smith & Williamson - Global Gold & Resources  47.79
New Capital - US Future Leaders  46.69
DMS - Charteris Gold & Precious Metals  46.45
Schroder - ISF Global Energy 45.91
Goldman Sachs - North America Energy & Energy Infrastructure Equity Portfolio 45.54
LF Canada Life - Global Resource 44.9
MFM - Techinvest Special Situations 44.15
BlackRock - GF World Energy 43.78
BlackRock - GF World Mining 42.76
Mirabaud - UK Equity High Alpha 42.37
LF Miton - UK Smaller Companies  41.05
Morgan Stanley - US Advantage 40.03
MFM - Junior Oils Trust 39.2

Source: FE/AJ Bell

Worst performing funds

Fund Performance (%)
LF - Equity Income (16.73)
ASI - Strategic Investment Allocation (15.66)
First Arrow - Diversified  (13.76)
VT - Moray Place Investment Company (11.62)
Aviva Investors - European Property  (7.03)
Canada Life - UK Property Jersey (6.80)
Janus Henderson - Multi Asset Credit (6.60)
Winton Trend (5.82)
LF Canada Life - UK Property ACS (5.56)
iShares - Overseas Government Bond Index  (5.34)
Kames - Property Income (5.09)
Aviva Investors - UK Property (4.95)
Janus Henderson Inst - Overseas Bond (4.40)
Pictet TR - Atlas (4.37)
Capital Group - Euro Bond (LUX)  (4.26)
Threadneedle - UK Property Authorised Investment (4.20)
Threadneedle - Global Bond (4.20)
Standard Life Investments - UK Real Estate  (4.18)
Scottish Widows - International Bond (4.13)
Threadneedle European Bond (3.96)

Source: FE/AJ Bell

What investors have been buying and selling

Investors used lockdown to snap up bargains, with three-quarters of the deals done on AJ Bell Youinvest being purchases of assets, compared to just a quarter being investors selling. Global funds dominated the purchases, with investors looking to get broad exposure to global markets and relying on fund managers to make the tactical decisions about where to invest. Lots of investors showed they had the stomach for a bit more risk, with two special situations funds making it into the top 10 funds – with many expecting the strategy of investing in companies in crisis to profit when markets rebound. However, investors also outsourced the decision of where to allocate money, opting for a number of ‘one-stop shop’ funds such as the Vanguard LifeStrategy funds, RIT Capital and AJ Bell’s own multi-asset funds.

For stock hunters, airlines and travel companies were popular, with investors hoping to profit from previous falls in the stocks before the lockdown and hoping the outlook for these companies wouldn’t be as dire as many predicted. Oil giants featured for similar reasons, but investors will have been dealt a blow by Shell’s scrapping of its dividend at the end of April.

Funds Shares Investment Trusts
1. AJ Bell funds 1. Lloyds 1. Scottish Mortgage
2. Fundsmith Equity 2. BP 2. Scottish IT
3. Vanguard Lifestrategy funds 3. Royal Dutch Shell 3. RIT Capital
4. Lindsell Train Global Equity 4. Barclays 4. Witan
5. Fidelity World 5. GlaxoSmithKline 5. Finsbury G&I
6. Fidelity Global Special Situations 6. International Consolidated Airlines 6. Smithson
7. TB Evenlode Income 7. Aviva 7. Polar Capital Technology
8. Jupiter UK Special Situations 8. EasyJet 8. Temple Bar
9. Polar Capital Global Technology 9. Legal & General 9. Alliance Trust
10. Henderson UK Absolute Return 10. Carnival 10. F&C

Source - AJ Bell completed buy orders between 23/03/20 – 06/05/20

Who has raised money?

A positive sign is how many companies have been able to raise money during the lockdown, with 91 different businesses managing to raise £5.2bn of additional money. Of these, 51 companies have each raised £5m or more. For many companies the fundraising has been at a discount to the value of their shares, making it problematic for existing shareholders who couldn’t access the fundraise as their shares are diluted.

However, on the plus side the markets have broadly viewed these calls for additional funding as positive and the shares prices have generally risen on the news of the fundraising. As well as being used to shore up the balance sheet, the money raised is also being used for working capital and potential future acquisitions.

Largest fundraises during lockdown

Company Date Cash raised (£M)
Informa 16-Apr-20 1,001 
Aston Martin 30-Mar-20 536
Carnival 02-Apr-20 402
Hiscox 05-May-20 375
ASOS 08-Apr-20 247
National Express 06-May-20 235
SSP 25-Mar-20 216
Hays 02-Apr-20 200
Auto Trader 01-Apr-20 186
Assura 07-Apr-20 185

Source: Company account

*Source: Sharepad
**Source: FE

Important information: Past performance is not a guide to future performance and some investments need to be held for the long term. These articles are for information purposes only and are not a personal recommendation or advice.

ajbell_laura_suter's picture
Written by:
Laura Suter

Laura Suter is Personal Finance Analyst at AJ Bell. She is a multi-award winning former financial journalist, having specialised in investments. Laura joined AJ Bell from the Daily Telegraph, where she was investment editor. She has previously worked for adviser publications Money Marketing and Money Management, and has worked for an investment publication in New York. She has a degree in Journalism Studies from University of Sheffield.