Interactive Investor

Best and worst-performing funds in March 2021

7th April 2021 13:18

Kyle Caldwell from interactive investor

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UK funds had a strong March, but at the wrong end of the table three Baillie Gifford funds feature.  

Two UK fund sectors were in the top five best-performing sectors in March. Both sectors have benefited from the ‘reflation trade’ that has been playing out in the markets.

Figures from FE Analytics, compiled by Shore Financial Planning, show UK Equity Income and UK Smaller Companies were the second and third best-performing sectors last month, returning a respective 4.8% and 4.3%. The duo were pipped by Global Equity Income, in which the average fund returned 5.1%. In fourth and fifth place were Europe ex UK and North America, up 4.2% and 4.1%.

Among investment trusts, it was a similar story with the UK Equity Income sector topping the tables with a return of 7.5%, followed by UK All Companies and UK Equity & Bond Income, both up 7.3%.

The UK market has been hotly tipped to be one of the main beneficiaries of the ‘reflation trade’ (economic growth and inflation accelerating at the same time), which is a market trend that has been playing out over the past couple of months. Cyclical stocks, which the UK market has plenty of, are expected to perform well under the reflation trade.

In addition, an improvement in the outlook for dividends, following a number of firms returning to the dividend register in recent months, has boosted investor sentiment for income shares.

Ben Yearsley, investment director at Shore Financial Planning, notes the UK’s vaccine roll-out is also having a positive impact on sentiment.

He adds: “In the UK, the virus appears to be receding quickly, and the partial re-opening over the last few weeks hasn’t had a material impact on caseloads. This bodes well for the economy as restrictions are eased further over the coming weeks and months. The question now is how big the economic rebound will be and whether central banks are prepared to let economies run much hotter without putting rates up.”

In the overall top 10, covering all funds (not just those available on interactive investor), three UK funds feature: RWC UK Value, Jupiter Income Trust and Stonehage Fleming UK Equity Income.

Top 10 performing funds in March 2021 

Funds 

Return (%)

Sanlam US Dividend

11.61

Robecco BP US Large Cap Equities

9.73

RWC UK Value

9.27

VT Price Value Portfolio

9.16

Lazard Global Managed Volatility

8.95

Natixis Harris Associates US Equity

8.92

Robecco QI US Conservative Equities

8.9

Jupiter Income Trust

8.82

Stonehage Fleming UK Equity Income

8.79

VT De Lisle American

8.75

Performance figures 28 February 2021 to 31 March 2021. Source: FE Analytics.

In terms of the losers, gold funds dominated, but it was also notable to see three Baillie Gifford funds in the bottom 10 performers: Baillie Gifford Global Discovery, Baillie Gifford Health Innovation and Baillie Gifford American.

This serves as a reminder of the benefits of diversification, which can be achieved by investing in a mixture of fund styles (such as growth and income) as well as across different assets (shares, bonds, property and alternative investments).

“The top of the performance tables for March is dominated by out-of-favour value and cyclically focused funds. [It is important to] have balance in portfolios and [remember] that one style doesn’t dominate in perpetuity,” adds Yearsley.

In terms of sectors, China/Greater China was the worst performer, with a loss of 4.6% over the month, followed by Global Emerging Market Bonds Local Currency and Technology & Telecommunications, down 4.6% and 2.5%. Completing the bottom five sectors were Asia Pacific including Japan and Global Emerging Market Bonds Blended, both losing 0.8%.

Bottom 10 performing funds in March 2021 

Fund

Return (%)

Alger Small Cap Focus

-12.59

Liontrust Global Smaller Companies

-11.7

WS Charteris Gold & Precious Metals

-11.36

Jupiter Gold & Silver

-11.07

MFM Junior Gold

-10.53

Baillie Gifford Global Discovery

-9.84

Baillie Gifford Health Innovation

-9.8

Premier Miton US Smaller Companies

-9.36

Multipartner Baron Global Advantage Equity

-8.93

Baillie Gifford American

-8.82

Performance figures 28 February 2021 to 31 March 2021. Source: FE Analytics.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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