Fund winners and losers in November 2020
Some written-off funds and sectors were the biggest winners.
2nd December 2020 10:42
by Hannah Smith from interactive investor
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Some written-off funds and sectors were the biggest winners.
Stock markets roared ahead in November in a dramatic turnaround from the previous month, as Covid-19 vaccine news lifted investor optimism and stock prices.
A strong 13% rise from the FTSE 100 index and a bounce for sterling over the month meant that beleaguered UK fund sectors suddenly returned to strength. The Investment Association’s (IA) UK Equity Income sector rose 16%, while IA UK All Companies posted a 14% increase.
Top five fund sectors in November 2020
| Fund sector | Return (%) |
|---|---|
| UK Equity Income | 15.8 |
| UK All Companies | 14.2 |
| Europe ex UK | 14.1 |
| European Smaller Companies | 13.2 |
| UK Smaller Companies | 12.5 |
Source: FE Analytics. Table returns 31 October 2020 to 30 November 2020. Fund sectors exclude Money Market sectors.
Among investment trusts, there was a similar trend, with the Association of Investment Companies (AIC) UK Equity Income sector proving the best performer, up 20%, and the AIC UK All Companies and AIC UK Equity & Bond Income also in the top five.
Top five trust sectors in November 2020
| Trust sector | Return (%) |
|---|---|
| UK Equity Income | 20.5 |
| UK Equity & Bond Income | 19.9 |
| UK All Companies | 19.8 |
| European Emerging Markets | 19.6 |
| Latin America | 18.8 |
Source: FE Analytics. Table returns 31 October 2020 to 30 November 2020. Trust sectors exclude Venture Capital Trusts.
Among the losers for the month were bond sectors, with a slight negative return from IA UK Gilts and IA UK Index Linked Gilts, while IA Global Bonds and IA Sterling Corporate Bond generated a slight positive return.
Bottom five fund sectors in November 2020
| Fund sector | Return (%) |
|---|---|
| UK Gilts | -0.7 |
| UK Index Linked Gilts | -0.6 |
| UK Direct Property | 0 |
| Global Bonds | 0.5 |
| Sterling Corporate Bond | 1.8 |
Source: FE Analytics. Table returns 31 October 2020 to 30 November 2020. Fund sectors exclude Money Market sectors.
Fund winners and losers
At the individual fund level, energy funds were among the winners during November, with energy funds from Schroders and Guinness taking first and second place. Schroder ISF Global Energy boasted an impressive 43% return as the oil price saw a $10 bounce from below $40 per barrel to approaching $50 per barrel.
The rest of the list was a bit of a mixed bag, notes Ben Yearsley, director at Shore Financial Planning, who supplied the figures. “The top 10 was a smorgasbord, with equity income, Europe and special situations funds all in the list. The recently retired Alastair Mundy’s Ninety One Special Situations and Global Special Situationsfunds both made the top 10 – a sure sign value had a good month,” he says.
Top 10 funds in November 2020
| Fund | Return (%) |
|---|---|
| Schroder ISF Global Energy | 42.9 |
| Guinness Global Energy | 34.7 |
| BlackRock GF World Mining | 33.1 |
| Courtiers UK Equity Income | 31.2 |
| Aviva UK Listed Equity High Alpha | 30.8 |
| LF Odey Continental European | 29.4 |
| Ninety One UK Special Situations | 29.3 |
| VT Cape Wrath Focus | 29 |
| Ninety One Global Special Situations | 28.3 |
| Quilter Investors Global Unconstrained Equity | 26.8 |
Source: FE Analytics. Table returns 31 October 2020 to 30 November 2020.
At the foot of the tables, seven of the 10 worst-performing funds were gold and precious metals. Yearsley points out: “Clearly those investors who bought in much earlier in the year are still sitting on nice gains. Ninety One Global Gold propped up the table, falling 11.1%. Argonaut’s Absolute Return fund was the second worst-performing fund, showing that shorting (seeking to profit from share price falls) is fraught with danger in volatile markets.”
Bottom 10 funds in November 2020
| Fund | Return (%) |
|---|---|
| Ninety One Global Gold | -11.1 |
| Argonaut Absolute Return | -9.2 |
| Smith & Williamson Global Gold & Resources | -9.1 |
| BlackRock Gold & General | -8.7 |
| Quilter Precious Metals Equity | -8.6 |
| Winton Diversified | -6.6 |
| ES Gold & Precious Metals | -6.6 |
| DMS Charteris Gold & Precious Metals | -6 |
| Oxeye Hedged Income | -5.7 |
| Ruffer Gold | -5.7 |
Source: FE Analytics. Table returns 31 October 2020 to 30 November 2020.
Yearsley says November’s performance figures show the importance of having a balanced portfolio, as the rebound for value investing will have caught many investors by surprise.
“While in the long term, you need companies in your funds to grow, November does highlight the need for balance in your portfolio,” he argues. “Some of the written-off funds and sectors were the biggest winners. If a Brexit deal is imminently signed, you could see the UK being the market to follow in 2021 as, on many measures, it looks good value against global peers.”
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