The fund winners and losers in August 2020
We detail the best- and worst-performing funds and fund sectors.
4th September 2020 10:10
by Hannah Smith from interactive investor
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We detail the best- and worst-performing funds and fund sectors.
August was a month in which the S&P 500 index hit a new all-time high, Japan was one of the strongest global markets, and investors looked for signs of a V-shaped recovery in the UK. Against this backdrop, which funds and trusts performed the best, and which languished? Shore Financial Planning ran the numbers to determine the winners and losers in an eventful August.
Topping the performance charts was James Hanbury’s Odey Absolute Return fund, rising more than 13%.
Perhaps surprisingly in a record-low interest rate environment, the second-best performing fund is Aptus Global Financials, up 12%. The £40 million fund, which sits in the Investment Association’s Global Equity Income sector, invests in global financial services companies: banks, insurers and asset managers.
There was not one clear theme among the best performers, with the US, the UK, Europe, emerging market and specialist funds all featuring. The top 20 is even more diverse, with Japan, Asia and UK smaller companies funds also appearing, notes Ben Yearsley, director at Shore Financial Planning.
Top 10 funds in August 2020
| Fund | Return (%) |
|---|---|
| Odey Absolute Return | 13.16 |
| Aptus Global Financials | 11.87 |
| LF Access Long Term Global Growth Investment | 11.58 |
| SVM Continental Europe | 11.17 |
| Premier UK Growth | 10.63 |
| Baillie Gifford Long Term Global Growth Investment | 10.57 |
| Guinness Sustainable Energy | 10.47 |
| New Capital US Growth | 10.44 |
| Aubrey Global Emerging Markets Opportunities | 10.36 |
| Alquity Indian Subcontinent | 10.29 |
Source: FE Analytics. Table returns 31 July 2020 to 31 August 2020.
However, the bottom 10 funds did have an obvious theme – seven of them were Latin America or Brazil funds. Scottish Widows Latin American was the worst performer, down more than 8%, while other Latin America funds from Liontrust, Invesco and Aberdeen Standard also made the list. “On most measures, Brazil has had a poor Covid-19 response, as has Mexico,” adds Yearsley. “Add in the reliance on natural resources and commodities and you have a toxic combination, though a weakening dollar could be slightly better news, as it normally is for emerging markets.”
Bottom 10 funds in August 2020
| Fund | Return (%) |
|---|---|
| Scottish Widows Latin American | -8.41 |
| Liontrust Latin America | -8.27 |
| HSBC GIF Brazil Equity | -8.17 |
| Invesco Latin American | -7.96 |
| Aberdeen Standard Latin American Equity | -7.82 |
| BlackRock GF Latin American | -7.57 |
| BlackRock Institutional Bond Over 15 year Gilt | -7.11 |
| JPM Brazil | -7.1 |
| Janus Henderson Instl Long Datd Gilt | -6.53 |
| iShares Over 15 Years Gilts Index | -6.45 |
Source: FE Analytics. Table returns 31 July 2020 to 31 August 2020.
At sector-level performance, the Japanese Smaller Companies peer group was the best over August, gaining 5.7%, with the main Japan sector finishing fifth. UK Smaller Companies, Technology & Telecoms, and North America completed the line-up with returns of around 5%.
Top five fund sectors in August 2020
| Fund sector | Return (%) |
|---|---|
| Japanese Smaller Companies | 5.7 |
| UK Smaller Companies | 5.52 |
| Technology & Telecommunications | 5.21 |
| North America | 4.98 |
| Japan | 4.61 |
| BlackRock GF Latin American | -7.57 |
| BlackRock Institutional Bond Over 15 year Gilt | -7.11 |
| JPM Brazil Equity | -7.1 |
| Janus Henderson Inst Long Dated Gilt | -6.53 |
| iShares Over 15 Years Gilts Index | -6.45 |
Source: FE Analytics. Table returns 31 July 2020 to 31 August 2020.
The worst-performing sector during August was UK Index Linked Gilts, down more than 5%, with UK Gilts down almost 4%. Fixed-income sectors made up the next three positions, with slight negative returns for the month. “Is this a sign of buyers’ strike or just that the negative rates are too negative?” asks Yearsley.
Bottom five fund sectors in August 2020
| Fund sector | Return (%) |
|---|---|
| UK Index Linked Gilts | -5.39 |
| UK Gilts | -3.83 |
| Global EM Bonds Local Currency | -1.66 |
| Global Bonds | -0.9 |
| Sterling Corporate Bonds | -0.86 |
Source: FE Analytics. Table returns 31 July 2020 to 31 August 2020.
Smaller companies featured among the best-performing investment trust sectors for the month, with European Smaller Companies coming top with a 7.6% return, and North American Smaller Companies placing third with a 6.4% return. Asia Pacific, Environmental and Technology & Media completed the top five.
Top five trust sectors in August 2020
| Investment trust sectors | Return (%) |
|---|---|
| European Smaller Companies | 7.61 |
| Environmental | 6.55 |
| North American Smaller Companies | 6.36 |
| Asia Pacific | 6.24 |
| Technology & Media | 5.56 |
* excludes VCT
Source: FE Analytics. Table returns 31 July 2020 to 31 August 2020.
“Risk on or risk off? From a market perspective it was a bit of both as the US and tech hit all-time highs and bonds fell. Latin America had a torrid time and the UK again treaded water for no apparent reason,” says Yearsley.
“Maybe it’s the lack of tech in the UK as that has been the clear driver of US markets, or it could be Brexit worries coming to the fore again. Despite a resurgence of Covid-19 cases in many European countries, and some Asian ones where it seemed under control, markets appear less worried.”
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.
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.