Interactive Investor

Fund winners and losers in the second quarter of 2024

As we begin the third quarter of the year, we look back at some of the standout winning and losing funds of the past three months.

3rd July 2024 10:58

by Sam Benstead from interactive investor

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The past three months have delivered strong returns for investors. From 1 April to 30 June, the FTSE All-Share index, including reinvested dividends, rose 3.7%. Meanwhile, the S&P 500 index of America’s largest shares also rose 3.7% and the MSCI World index rose 2.4%.

This took their gains for the year, in sterling terms, to 16.3% for US shares, 12.9% for global shares, and 7.4% for UK shares. With inflation now running at 2% in the UK, investors have made a good “real” profit. Even cash rates, at around 5%, would have delivered a positive inflation-adjusted gain.

However, some open-ended funds and investment trusts have delivered far better – and worse – returns. We look at some of the standout winners and losers in the second quarter of the year.

Trusts that bounced back

Investment trust shares trade on the stock market, so their share prices can diverge from the underlying value of their assets. This is especially true for strategies that invest in unlisted assets, such as infrastructure, where fund managers have to estimate their value.

This means that some trusts’ shares can be very volatile. This has been the case for Gresham House Energy Storage, which has been under pressure from shareholders for cancelling dividends. While the shares delivered a total return of 68% over the past three months, over six months it is down -35% and over one year down -49%.

It has been a similar story at Hipgnosis Songs Fund, which has had to write down the value of its holdings and cancel dividends. However, there has been a recovering for the shares due to private equity interest, producing a 48% three-month return.

Molten Ventures, up 54.7%, was another standout performer in the second quarter of the year. It invests in fast-growing private companies and optimism is returning to that part of the market due to expectations for lower interest rates and renewed excitement around tech shares.

It's on a good run, rising 32% over 12 months. However, over three years it has lost investors -59% and shares are still nearly 70% below their late 2021 peak.

Other trusts performing very well during the last quarter include abrdn New India and Cordiant Digital Infrastructure, which both rose by about a quarter.

The top open-ended funds and ETFs

Open-ended funds generally invest in listed assets, and the unit price of the fund is tied to the value of those underlying assets, so they do not experience as much volatility as investment trusts. Nevertheless, there were some very strong performances over the past three months.

UK smaller companies was a standout area, with TM CRUX UK Smaller Companies leading the pack with a 15.4% three-month return, followed by Schroder UK Smaller Companies on 13.5%. JPMorgan UK Small Cap Growth & Income returned 13.5% too.

Some optimism has returned to UK shares this year as interest rates look set to fall soon and the economy avoided a recession. Smaller companies, which are sensitive to economic news and are even more lowly valued than large shares, are bouncing back from a difficult 2022 and 2023.  

India was also a standout sector, with Stewart Investors Indian Subcontinent Sustainability rising 14.9% over the past three months. Other strong open-ended India funds were Invesco India Equity, abrdn Indian Equity and Alquity Indian Subcontinent.

India continues to be one of the hottest markets in the world, as economic growth accelerates, multinational companies look for alternatives to manufacturing in China, and its recent election delivered another win for market favourite Narendra Modi.

Meanwhile, precious metal prices rose, with Jupiter Gold & Silver and SVS Baker Steel Gold & Precious Metals delivering 14.5% returns over three months. The gold price has risen about 15% this year. These funds invest in the physical commodities, via exchange-traded funds (ETFs), as well as mining companies.

The technology sector continued its strong recovery from a very challenging 2022, with tech indices hitting new all-time highs throughout 2024.

One of the top funds in the second quarter was L&G Global Technology Index Trust. Investment trust Allianz Technology Trust also performed well, alongside technology ETFs iShares S&P 500 Information Technology Sector UCITS ETF and Xtrackers MSCI USA Information Technology UCITS ETF. These tech funds rose about 14% each over three months.

Meanwhile, driven by a 20% return from Taiwan Semiconductor Manufacturing Company, iShares MSCI Taiwan UCITS ETF and Xtrackers MSCI Taiwan UCITS ETF returned about 13% each.

FundQ2 return (%)Half year return (%)One-year return (%)Three-year return (%)Five-year return (%)
Gresham House Energy Storage Fund 68.18-35.5-49.81-33.68-14.28
Molten Ventures 54.6931.8436.98-59.51-26.8
Hipgnosis Songs Fund 48.4142.2230.36-4.8120.62
abrdn New India Investment Trust 26.3824.4747.6744.5662.58
JPM Emerging Europe Equity 23.6819.2925.12-98.98-98.9
Cordiant Digital Infrastructure22.192.36-5.44-18.37
TM CRUX UK Smaller Companies 15.419.0612.19
Stewart Investors Indian Subcontinent Sustainability 14.9117.4424.4757.93107.18
Jupiter Gold & Silver 14.5412.6915.37-3.9546.45
SVS Baker Steel Gold & Precious Metals 14.5212.3221.311.143.2
Invesco India Equity 14.1119.1237.6163.488.79
Allianz Allianz Technology Trust 14.130.6451.3434.63140.89
abrdn Indian Equity 13.9918.3230.0835.1455.52
L&G Global Technology Index Trust 13.9729.5145.2968.03211.98
iShares S&P 500 Information Technology Sector UCITS ETF 13.7429.9443.0486.67228.74
Alquity Indian Subcontinent 13.7414.0523.8648.8477.27
iShares MSCI Taiwan UCITS ETF13.5724.1434.8729.39140.14
Schroder UK Smaller Companies 13.5416.3818.65-16.6428.84
JPMorgan UK Small Cap Growth & Income 13.4913.7528.01-10.5967.56
Xtrackers MSCI USA Information Technology UCITS ETF 12.9828.2241.6775.52213
HSBC MSCI Taiwan Capped UCITS ETF 12.6723.7134.529.86141.88
Source: FE FundInfo, returns as of 30 June 2024

Past performance is not a guide to future performance.

What about the worst performers?

Formerly JPMorgan Russian Securities, JPMorgan Emerging Europe Middle East & Africa Securities dropped -23% last quarter. This included a -30% drop in April when news broke that JPMorgan is in a court battle to stop a Russian bank from seizing its assets.

Meanwhile, Regional REIT fell -22.5%, with the property investor facing concerns about solvency and turning to markets to raise more cash.

One sector that had a lot of poorly performing strategies was Latin America. This included generalist funds, such as BlackRock GF Latin America, Schroder ISF Latin AmericanBarings Latin America and iShares MSCI EM Latin America UCITS ETF, which all fell about -14%. Xtrackers MSCI Mexico Ucits ETF dropped -17% and HSBC Brazil Equity dropped -14%.

Latin American stock markets are often heavily dependent on the mining and oil sectors. But because commodity prices are falling (with the exception of gold and silver) and inflation is subsiding, these types of business are suffering.

While Taiwan did well last quarter, other parts of Asia did not: HSBC MSCI Indonesia UCITS ETF fell -14.2% and Xtrackers MSCI Philippines UCITS ETF fell -11.2%

Crypto also had a bad quarter. Invesco CoinShares Global Blockchain UCITS ETF lost -9.5%, linked to falling cryptocurrency prices.

FundQ2 return (%)Half year return (%)One-year return (%)Three-year return (%)Five-year return (%)
JPMorgan Emerging Europe Middle East & Africa Securities -22.99-27.793.09-86.76-85.21
Regional REIT -22.45-51.78-61.38-75.62-77.92
Xtrackers MSCI Mexico UCITS ETF -17.02-15.97-7.3233.5841.97
BlackRock GF Latin American-15.01-19.57-11.224.47-12.52
HSBC MSCI Indonesia UCITS ETF -14.26-11.77-13.5622.05-9.33
HSBC Brazil Equity-14.19-20.27-13.21-21.55-39.5
Schroder ISF Latin American -13.72-15.61-8.74.067.39
Barings Latin America -13.48-16.45-7.0711.396.48
Invesco CoinShares Global Blockchain UCITS ETF-9.459.3344.54-12.05120.22
Source: FE FundInfo, returns as of 30 June 2024

Past performance is not a guide to future performance.

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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