Interactive Investor

Fund winners and losers in February 2021

‘Tiny wonders’ shine with managers bullish on UK growth. We name the best and worst-performing funds.

3rd March 2021 10:37

Nina Kelly from interactive investor

‘Tiny wonders’ shine with fund managers bullish on UK growth. Nina Kelly names the best and worst-performing funds, and sectors.

Last month brought some cheer for weary British investors in the form of a road map out of the national lockdown, a return to the dividend register for some companies, including UK banks, and a rebound in the oil price. Equity income investors who are reliant on dividend payments have endured a difficult 12 months, but at last there is some return to business as usual.

Tech stocks had a tough end to the month following a rise in US bond yields, which resulted in a sell-off, but the lack of tech in UK markets meant domestic indices escaped relatively unscathed. The FTSE 100 returned 1.58% in February.

Meanwhile, unemployment rose to 5.1%, but Britons lucky enough to have kept their job during the pandemic now have significant savings due to not having to commute. While many politicians and economists are hoping for a second ‘Roaring Twenties’ as pent-up demand is released, there are fears that it could lead to a spike in inflation.

Tiny wonders

Focusing on the month of February, among the top-performing funds were a medley of small caps, financials, and equity income. At the top of the table was the LF Brook Absolute Return, which gained 21.35%. In third place, Premier Miton UK Smaller Companies, which is overseen by long-standing fund manager Gervais Williams, gained more than 14%, while Guinness Global Energy (fourth) rose more than 13%. The latter’s performance was fuelled by  oil ending the month at over $64 a barrel. 

Top 10 funds in February 2021

Fund name One-month return (%)
LF Brook Absolute Return 21.35
Cape Wrath Focus 15.17
Premier Miton UK Smaller Companies 14.44
Guinness Global Energy 13.18
Aptus Global Financials 11.69
Ninety One Global Special Situations 11.53
M&G Japan Smaller Companies 11.51
Quilter Investors Global Unconstrained Equity 11.15
Majedie Tortoise 10.79
Courtiers UK Equity Income 9.98

Source: FE Analytics. Performance figures 31 January 2021 to 27 February 2021.

The strugglers

At the other end of the table, seven of the worst-performing funds in February were long-dated bond and gilt funds following a sharp rise in yields. LF Equity Income, which was formally named the LF Woodford Equity Income fund and managed by Neil Woodford, took the wooden spoon and was down 12%. The fund is in the unusual position of being liquidated and money is being returned to investors. This step follows the gating of the fund in July 2019 owing to it being unable to sell illiquid holdings following a wave of redemption requests.

Gold had a poor month, and consequently Ninety One Global Gold was in second place, down 11.4%.

 Poor performers in February 2021

Fund name One-month return (%)
LF Equity Income -12.02
Ninety One Global Gold -11.42
Threadneedle Aquila Life OS Platinum -11.14
Janus Henderson Instl Long Dated Gilt -10.43
ASI Sterling Long Dated Government Bond -10.17
Fidelity Institutional Long Bond -9.99
Insight UK Government Long Maturity Bond -9.95
iShares Over 15 Years Gilts -9.91
BNY Mellon Long Gilt -9.65
Vanguard UK Long Duration Gilt Index -9.57

Source: FE Analytics. Performance figures 31 January 2021 to 27 February 2021.

Sector snapshot

The Investment Association UK Smaller Companies sector topped the table in February gaining 3.87%. Other small-cap sectors to make the top five included North American Smaller Companies (3.29%) and Japanese Smaller Companies (2%). The UK All Companies and UK Equity Income sectors also made the top five.

Top five fund sectors in February 2021

IA sector Return (%)
UK Smaller Companies 3.87
North American Smaller Companies 3.29
UK All Companies 2.84
UK Equity Income 2.58
Japanese Smaller Companies 2.04

Source: FE Analytics. Performance figures 31 January 2021 to 27 February 2021. The fund sectors exclude Money Market sectors.

Meanwhile, struggling sectors included UK Gilts, down 5.7%, and UK Index Linked Gilts, down 5.2%. 

Poorly performing fund sectors in February 2021

IA sector Return (%)
UK Gilts -5.72
UK Index Linked Gilts -5.28
Global EM Bonds Local Currency -4.14
Global EM Bonds Hard Currency -3.43
Sterling Corporate Bond -2.67

Source: FE Analytics. Performance figures 31 January 2021 to 27 February 2021. The fund sectors exclude Money Market sectors.

Ben Yearsley, investment director at Shore Financial Planning and supplier of the figures, said: “Worries about the Covid crisis are less prevalent, with many [people] now concerned about the withdrawal of stimulus and interest rates increasing. Many fund managers are saying that growth will easily outstrip official forecasts, both in the UK and US, with huge levels of pent-up consumer demand waiting to be unleashed.”

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