Best performing funds and investment trusts Q1


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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.

The first quarter of the year saw a resurgence of some areas of the market which have been badly beaten up by the pandemic, as investors look forward to life beyond covid. A number of funds even UK shopping centres posted a decent quarter of performance, though the REITs Drum and Hammerson are still significantly down on their pre-pandemic levels.

Funds investing in the US generally continued to do well, with the S&P 500 now having broken through the 4,000 mark for the first time. Most UK equity funds also enjoyed a rare glimpse of the top of the performance tables, thanks in part to the cyclical make-up of the UK stock market, and the reassessment of the prospects for these economically sensitive stocks that has taken place since the arrival of effective vaccines.

Many retail investors are still fleeing the UK stock market however, with £1.7 billion withdrawn from UK equity funds in January and February, according to Investment Association data. These investors could find themselves missing out on a resurgent UK stock market, if the global economy performs as expected this year, as the banks and commodity stocks that play such a big part in the FTSE 100 should do well in an expansionary economic environment.

At the other end of the performance table, fixed income funds had a dismal quarter, as markets ditched safe haven assets in anticipation of brighter economic climes. Of particular concern to UK investors is the big drop in gilt funds, as these are prized by investors seeking a safe haven for their money, and a 7.4% fall in three months doesn’t precisely fit that billing. If risk appetite continues to increase with the global vaccine roll out, and markets start looking forward to potential interest rate rises, recent falls could be the thin end of the wedge for UK government bonds. These assets do still provide some diversification, and they should hold up well if the pandemic or the economy takes a turn for the worse. But based on the high prices and low yields currently on offer in the market, the long term prospects for gilt funds don’t look good.

Best performing Investment Association fund sectors Q1 2021

Sector Q1 performance %
IA UK Smaller Companies 9
IA North American Smaller Companies 6.9
IA UK Equity Income 6.8
IA UK All Companies 5.8
IA North America 5
IA Global EM Bonds Hard Currency (4.3)
IA Global EM Bonds Blended (4.6)
IA UK Index Linked Gilts (6.7)
IA UK Gilts (7.4)
IA Global EM Bonds Local Currency (8.1)

Source: FE Total return 31/12/2020 to 31/03/2021

Best performing funds Q1 2021

  Q1 Performance %
Schroder ISF Global Energy 25.2
M&G Japan Smaller Companies 22.9
VT De Lisle America 22.7
Guinness - Global Energy 20.5
Premier Miton UK Smaller Companies 20.4
Aberforth UK Small Companies 19.8
VT Cape Wrath Focus 19.3
TM RWC UK Equity Income 17.1
Barings Global Agriculture 17.1
Legg Mason IF ClearBridge US Equity 17

Source: FE Total return 31/12/2020 to 31/03/2021, sterling denominated funds only

Best performing investment trusts Q1 2021

  Q1 performance %
All Active Asset Capital Limited 184.9
Agronomics Limited 135.8
Drum - Income Plus Reit 73.6
Drum - Drum Plc 44.3
Tirupati Graphite PLC 43.9
Tiger Royalties And Investments PLC 42.9
Hammerson PLC 40.8
Seneca Growth Capital VCT PLC 39.6
New City Investment Managers - Geiger Counter 38.3
Miton UK MicroCap Trust PLC 37.1

Source: FE Total return 31/12/2020 to 31/03/2021

These articles are for information purposes only and are not a personal recommendation or advice.

ajbell_laith_khalaf's picture
Written by:
Laith Khalaf

Laith Khalaf is a Financial Analyst at AJ Bell. He began his financial services career in 2001 at Hargreaves Lansdown, where he worked a variety of roles across pensions and investments, covering both DIY and advised business. Laith began to focus on research and investments in 2007, becoming a leading industry commentator. He’s provided daily business bulletins on LBC, is a regular contributor to the financial pages of the national press, and a frequent guest on TV and radio. He has a degree in Philosophy from Cambridge University.