Six months of market mayhem – the best and worst performing funds of the year

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The past six months has been a period most investors will never forget – but many would dearly like to. Markets have been on a wild ride, with the FTSE 100 index hitting a high of 7,675 in January before plummeting to a low of just under 5,000 in March.

Investors in UK markets are still sitting on heavy losses as we near the six-month marker in 2020, with the FTSE 100 index down 16%, the FTSE All Share down a similar 17% and the FTSE 250 index of smaller companies down just over 19%. In comparison the rest of the world is looking brighter, with the S&P 500 market down a more muted 3.6%, the Nikkei 225 down 5.5% and the SSE down 3.6%. The MSCI World index of global companies has delivered a much less dramatic fall of 0.5% over that time.

This is reflected in the best performing fund being Baillie Gifford American with a return of over 53%. At the other end of the spectrum is the suspended LF Equity Income fund, formerly the Woodford Equity Income fund, with a fall of 42% as assets have been sold off at depressed prices and proceeds returned slowly to investors.

Fund investors will be dismayed that UK active funds have failed to prove their worth over this time, on average. The average UK All Companies fund has delivered the same return as the FTSE All Share year-to-date, of (16.6%). In total, almost half have delivered a worse return than the index*.

No UK All Companies funds managed to achieve a positive return, with the best performance coming from ethical fund Royal London Sustainable Leaders Trust, with a 1.7% loss. It benefitted from its lack of exposure to oil and energy companies and its overweight to healthcare and technology stocks. The worst performing was value-focused ASI UK Recovery Equity, which lost investors 39.5% year-to-date.

Investors in UK Equity Income funds have fared worse, with the average fund manager losing more than the FTSE All Share and the FTSE 100 – an average fall of 18.9% year-to-date. What’s more two-thirds of funds in the sector delivered a worse return than the market*.

The worst offender was UBS UK Equity Income, with a 28% loss. The fund has an overweight to financials and energy, which has hit performance harder than its peers. On the flip side, the best performing was LF Miton UK Multi Cap Income, with a 6.5% loss.

However, a bright spot for investors is Stateside, where active managers have managed to outperform markets on average. Usually the US market is dismissed as being too efficient for active managers to outperform, but the volatile markets have proved ripe ground for fund managers. The average US fund has returned 3.6% on average compared to the S&P 500’s return of 1.4%.

Many investors will have wanted to switch to steady-eddy funds in the market volatility, hoping to mitigate their losses. But many Absolute Return funds have failed to live up to their mandate of reducing downside risk during bumpy markets. On average the sector delivered a loss over the year to date of 2% and almost two-thirds of funds have delivered a loss during the period*.

The worst of a bad bunch was Natixis H2O MultiReturns with a 23.2% loss – far more than equity markets. Argonaut Absolute Return had the highest return, at 19.8% but that’s not the performance you’d expect of an absolute return fund that’s aiming to deliver stable returns in all markets. Of the 115 funds in the sector, only 40 managed to deliver returns ranging between 2% and (2%) - more in line with what you’d expect for the sector.

Fund performance

UK All Companies

Best performers Worst performers
Fund Performance (%) Fund Performance (%)
1 Royal London Sustainable Leaders Trust (1.7) ASI UK Recovery Equity  (39.5)
2 Aviva Inv UK Equity MoM (2.8) ASI UK Unconstrained Equity  (30.2)
3 BlackRock UK  (3.0) GVQ UK Focus (30.1)
3 VT Sorbus Vector  (3.3) GVQ Opportunities (29.2)
5 Ardevora UK Equity  (3.6) Invesco Income  (29.1)
6 Marlborough Multi-Cap Growth (4.3) Invesco High Income (28.7)
7 Baillie Gifford UK Equity Focus  (4.6) Invesco UK Strategic Income  (28.2)
8 CFP SDL Free Spirit  (4.7) JOHCM UK Dynamic  (27.3)
9 Ninety One UK Sustainable Equity  (4.9) Ninety One UK Special Situations  (27.3)
10 LF Lindsell Train UK Equity  (5.4) UBS UK Opportunities  (27.2)

Source: FE. Performance is 1 Jan 2020 to 19 Jun 2020

UK Equity Income

Best performers Worst performers
Fund Performance (%) Fund Performance (%)
1 LF Miton UK Multi Cap Income  (6.5) UBS UK Equity Income  (28.3)
2 ES R&M UK Equity Income  (8.5) Premier Monthly Income (27.7)
3 AXA Framlington UK Equity Income  (9.5) Courtiers UK Equity Income  (27.6)
4 Troy Asset Management Ltd Trojan Income  (10.0) Premier Income (27.6)
5 FP Octopus UK Multi Cap Income  (10.4) Premier Optimum Income  (27.5)
6 BlackRock UK Income  (10.9) MI Chelverton UK Equity Income  (27.5)
7 ASI UK Income Equity  (10.9) JOHCM UK Equity Income  (27.4)
8 DMS Charteris Premium Income  (11.9) TB Saracen UK Income  (27.3)
9 Santander Enhanced Income Portfolio (12.7) Aberdeen LF ASI Income Focus  (26.8)
10 LF Gresham House UK Multi Cap Income  (13.1) L&G UK Equity Income  (24.9)

Source: FE. Performance is 1 Jan 2020 to 19 Jun 2020

Absolute Return

Best performers Worst performers
Fund Performance (%) Fund Performance (%)
1 Argonaut FP Argonaut Absolute Return  19.8 Natixis H2O MultiReturns  (23.2)
2 Kames Global Equity Market Neutral  8.1 Liontrust GF European Strategic Equity  (21.9)
3 Wellington Global Total Return (UCITS)  8 VT iFunds Absolute Return Orange  (19.7)
4 GAM Star Emerging Market Rates 7.6 BlackRock Emerging Markets Absolute Alpha  (19.0)
5 BlackRock European Absolute Alpha  7.2 Jupiter Absolute Return  (13.5)
6 Thesis TM Tellworth UK Select  6.7 VT Woodhill UK Equity Strategic (12.4)
7 BlackRock Systematic Global Long Short Equity  6.5 Winton Absolute Return Futures  (10.7)
8 Merian UK Specialist Equity  6.4 VT iFunds Absolute Return Green  (9.7)
9 Allianz Fixed Income Macro  6.1 BNY Mellon Global Absolute Return  (9.5)
10 Eaton Vance Int (Ire) Global Macro  5.9 GAM Star Global Rates  (8.9)

Source: FE. Performance is 1 Jan 2020 to 19 Jun 2020

All Funds

Best performers Worst performers
Fund Performance (%) Fund Performance (%)
1 Baillie Gifford American  53.02 LF Equity Income  (42.4)
2 Morgan Stanley US Growth  49.59 HSBC GIF Brazil Equity (39.8)
3 LF Access Long Term Global Growth Investment  44.81 ASI UK Recovery Equity (39.5)
4 Baillie Gifford Long Term Global Growth Investment  44.2 Schroder ISF Global Energy (36.2)
5 Matthews China Small Companies  44.11 Alquity Latin America - Jul 16 (35.7)
6 LF Ruffer Gold  39.62 The VT Oxeye Hedged Income Option  (35.2)
7 Morgan Stanley US Advantage  37.81 Brown Advisory Latin American  (34.7)
8 Baillie Gifford Positive Change 33.61 JPM - Brazil Equity - (34.6)
9 T. Rowe Price Global Technology Equity  33.18 Guinness - Global Energy  (34.5)
10 Baillie Gifford Global Discovery 32.14 BlackRock - GF Latin American  (34.1)

Source: FE. Performance is 1 Jan 2020 to 19 Jun 2020

*Source: FE

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.