Interactive Investor

Five years on from Brexit vote: is UK on course for revival?

18th June 2021 16:55

Myron Jobson from interactive investor

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interactive investor looks at index performance comparisons since the Brexit vote in 2016, and the best and worst performing UK funds and investment trusts.

 

 

23 June marks the five-year anniversary of the Brexit vote, and while the UK market has rallied since the historic referendum, it still lags the rest of the world, according to new research by interactive investor, the UK’s second-largest direct to consumer investment platform.

European stocks have performed better since the UK’s split from the 27-nation bloc (23 June 2016 to 11 June 2021), with the MSCI Europe ex UK index generating more than double the performance of FTSE All Share (85% versus 40%). 

America’s S&P 500 index was the best performer, returning 132% over the period – far outperforming the FTSE 100 (37%) and FTSE 250 (49%). The MSCI World index, which tracks the performance of large and mid-cap equity across all 23 developed markets – including the UK – returned 104%.

Richard Hunter, Head of Markets, interactive investor, says: “For the majority of those five years, the Brexit clouds hung heavily on the UK markets.

“With the picture having cleared significantly since the exit was finalised, the UK is on a much more even keel. Both the FTSE100 and FTSE250 are ahead 11% in the year to date and in striking distance of the major US indices, where the Dow has added 12% and the S&P500 13% in 2021, with both nearing record highs.

“As with the US, the UK is seeing the benefit of a successful vaccination programme, the accelerating release of pent-up demand and an extremely accommodative stance from the central bank. Alongside warming international sentiment towards the UK as an investment destination on valuation grounds, it is possible that the tide is at last turning for the beleaguered UK indices.”

Best performing funds and investment trusts since the Brexit vote

MI Chelverton UK Equity Growth was the best performing fund in the IA UK All Companies sector, returning 187% over the past five years since 24 June 2016 (again to 11 June 2021). Slater Recovery is second on the list returning 137%, ahead of VT Sorbus Vector in third, returning 124%.

When it comes to investment trusts, Henderson Opportunities (LSE:HOT) (returning 90%) was the best performer in the equivalent sector, ahead of Mercantile (LSE:MRC) (70%) and Artemis Alpha Trust (LSE:ATS) (69%).

At the helm of the IA UK Smaller Companies sector is TM Stonehage Fleming AIM Fund, returning 211% over the same period, with FP Octopus UK Micro Cap Growth in second position and Marlborough Nano Cap Growth returning 187% and 186% respectively.

River and Mercantile UK Micro Cap Investment Company (LSE:RMMC) (183%) was the best performing investment trust in the AIC UK Smaller Companies sector, with Oryx International Growth (LSE:OIG) (164%) and BlackRock Throgmorton Trust (LSE:THRG) (150%) completing the top three.

Worst performing funds and investment trusts 

At the other end of the performance table, in the UK All Companies Sector, Jupiter UK Growth (-13%), Invesco UK Equity High Income Fund (-11%) and Invesco UK Equity (-8%) were the worst performing funds in the IA UK All Companies sector. 

The investment trusts at the foot of the equivalent sector - which is only comprised of nine trusts – fared better. The worst performer, Baillie Gifford UK Growth Trust (LSE:BGUK), returned 51%, although Baillie Gifford only took over the management of the trust in July 2018..

In the UK Smaller Companies sector, Sarasin UK Thematic Smaller Companies (32%), Dimensional UK Small Companies Fund (48%) and L&G UK Smaller Companies (also 48%), were the worst performers in the UK Smaller Companies category. 

On the investment trusts side, the worst performers were: Worsley Investors (LSE:WINV) (-37%); Crystal Amber (LSE:CRS) (-13%); and Chelverton Growth Trust (LSE:CGW) (-10%).

Dzmitry Lipski, Head of Funds Research, interactive investor, says: “The top of the performance tables is dominated by funds investing in small and mid-cap areas of the UK market that have typically outperformed.

“The UK & EU Brexit trade deal and the rapid vaccine roll out have changed the fortunes for the UK market. With economic forecasts of the UK economy being revised up, it is no surprised that funds investing in mid and small caps are doing well. To me (and I may be wrong!), they are in prime position to benefit from one of the most attractive growth outlooks for the UK market in decades.

“Over the past couple of months, we’ve witnessed renewed appetite to the UK market, with UK options creeping back into the top 10 fund bestsellers.

“The UK market is brimming with opportunity, with cyclical stocks, which the UK market has plenty of, expected to perform well. However, it is important to remember that investment trends do not dominate in perpetuity. The key, as always when investing for the long term, is portfolio diversification - investing in a range of different securities, asset classes and sectors, thereby minimising your overall level of risk and helps to fortify your portfolio against Brexit level events.”

Best performing UK All Companies funds/investment trusts since Brexit vote (24 June 2016 - 11 June 2021)

   
Fund    
   
Return since Brexit vote (24 June 2016 - 11 June   2021) (%)
   
Investment trust    
   
Return since Brexit vote (24 June 2016 - 11 June   2021) (%)   
   
MI Chelverton UK Equity Growth B Acc   
   
187.44   
   
Henderson Opportunities Ord   
   
89.89   
   
Slater Recovery P Acc   
   
137.19   
   
Mercantile Ord   
   
70.04   
   
VT Sorbus Vector A   
   
123.88   
   
Artemis Alpha Trust Ord   
   
68.99   
   
Slater Growth P Acc   
   
107.79   
   
Independent Ord   
   
68.90   
   
Premier Miton UK GrC Inc   
   
98.36   
   
Schroder UK Mid Cap Ord   
   
63.33   

 

Best performing UK Smaller Companies funds/investment trusts since Brexit vote (24 June 2016 - 11 June 2021)

   
Fund    
   
Return since Brexit vote (%)    
   
Investment trust    
   
Return since Brexit vote (%)   
   
TM Stonehage   Fleming AIM    
   
211.39   
   
River and Mercantile UK Micro Cap Ord   
   
183.21   
   
FP Octopus UK Micro Cap Growth P Acc   
   
186.61   
   
Oryx International Growth Ord   
   
163.69   
   
Marlborough Nano Cap Growth P Acc   
   
185.61   
   
BlackRock Throgmorton Trust Ord   
   
150.48   
   
Liontrust UK Micro Cap I Acc   
   
161.43   
   
JPMorgan Smaller Companies Ord   
   
141.84   
   
Marlborough UK Micro Cap Growth P Acc   
   
143.13   
   
BlackRock Smaller Companies Ord   
   
121.52   

 

Worst performing UK All Companies funds/investment trusts since Brexit vote (24 June 2016 - 11 June 2021)

   
Fund    
   
Return since Brexit vote (%)  
   
Investment trust    
   
Return since Brexit vote (%)    
   
Jupiter UK Growth I Acc   
   
-13.37   
   
Baillie Gifford UK Growth Trust Ord   
   
51.16   
   
Invesco UK Eq High Inc UK Z Acc   
   
-10.55   
   
Aurora Ord   
   
51.47   
   
Invesco UK Equity Inc UK Z Acc   
   
-8.01   
   
Fidelity Special Values Ord   
   
56.36   
   
Jupiter Growth & Income I Acc   
   
11.99   
   
JPMorgan Mid Cap Ord   
   
62.60   
   
Waverton UK A GBP   
   
13.33   
   

 

Worst performing UK Smaller Companies funds/investment trusts since Brexit vote (24 June 2016 - 11 June 2021)

   
Fund    
   
Return since Brexit vote (%)   
   
Investment trust    
   
Return since Brexit vote (%)    
   
Sarasin UK Thematic Smaller Co P Acc   
   
31.56   
   
Worsley Investors Ord   
   
-37.70   
   
Dimensional   UK Small Companies    
   
48.41   
   
Crystal Amber Ord   
   
-13.33   
   
L&G UK Smaller Companies I Acc   
   
48.44   
   
Chelverton Growth Trust Ord   
   
-10.39   
   
Halifax Smaller Coms C   
   
59.22   
   
Marwyn Value Investors Ord   
   
-8.00   
   
Scottish Widows UK Smlr Coms A   
   
60.01   
   
Gresham House Strategic Ord   
   
4.70   

 

UK sectors compared: Funds versus investment trusts

   
IA Sector Average (funds)   
   
24/06/2016   - 11/06/2021 (%)   
     
AIC Sector Average (investment trusts)   
   
24/06/2016   - 11/06/2021 (%)   
   
IA UK All Companies   
   
7.64   
     
UK All Companies   
   
10.66   
   
IA UK Equity Income   
   
5.65   
     
UK Equity Income   
   
7.93   
   
IA UK Smaller Companies   
   
14.88   
     
UK Smaller Companies   
   
11.35   

Source: interactive investor using Morningstar.

Past performance is no guide to the future and the value of investments (and the income from it) can go down as well as up and you may not get back the full amount invested. 

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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