Interactive Investor

Funds and trusts in first half of 2021: best and worst performers

5th July 2021 12:20

Kyle Caldwell from interactive investor

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The best-performing funds so far this year were bottom of the pile in 2020.

Three key themes dominate the top-performing funds and trusts in the first half of 2021: energy, smaller companies and private equity.

As the tables below show, four of the top six fund performers invest in energy shares. Such funds and the shares they back have benefited from the near 50% rise in the oil price over the six-month period. The best performer – Schroder ISF Global Energy – is up 41.5%.  

Schroder ISF Global Energy and Guinness Global Energy, in third place, were 2020’s worst performers, with falls of more than 30% each. This reflected a challenging year in which the oil price slumped.

Smaller company funds are also well represented in the top 10 performers, with three UK strategies featuring: Liontrust UK Micro Cap, Aberforth UK Smaller Companies and Castlefield B.E.S.T Sustainable UK Smaller Companies. In addition, Legg Mason Royce US Small Cap Opportunity is also present. 

For investment trusts, three that specialise in hunting for ‘hidden gems’ in the smaller company space are among the top 10 performers: Chelverton Growth Trust (LSE:CGW), Chelverton UK Dividend Trust (LSE:SDV) and River & Mercantile UK Micro Cap (LSE:RMMC).

The trio comfortably outpaced the 19.8% return for the FTSE Small Cap Index. 

The best performer, however, is Electra Private Equity (LSE:ELTA), which has seen its share price rise by 124.6%. It is joined by BMO Private Equity Trust (LSE:BPET) in the top 10, up 43.8%. Private equity investment trusts, with their specialist managers and closed-ended structure, are a way to access the hard-to-reach and illiquid part of the market that is unlisted companies. In addition, it is an area where there’s scope for dramatic uplifts when trusts sell successful holdings.

The rest of the top 10 trust performers since the start of the year is dominated by highly specialist strategies, which alongside the energy funds can blow both hot and cold in terms of performance. As an example, Geiger Counter (LSE:GCL), which invests in uranium shares, is up 159% over five years but down 50% over 10 years. With such special strategies, it is important for investors to understand the risks involved and limit exposure.

Top 10 best-performing active funds in first half of 2021

Fund Total return (%)
Schroder ISF Global Energy 41.5
GS North America Energy & Infrastructure 37.4
Guinness Global Energy 35.4
Consistent Opportunities Unit Trust 33
Aberforth UK Small Companies 32.9
BlackRock World Energy 31.5
Liontrust UK Micro Cap 31.4
Legg Mason Royce US Small Cap Opportunity 30.1
Castlefield B.E.S.T Sustainable UK Smaller Companies 29.7
VT De Lisle America 29.6

Source: FE Analytics. Data from 1 January 2021 to 1 July 2021. 

Top 10 best-performing investment trusts in first half of 2021

Investment trust Total return (%)
Electra Private Equity 124.6
Drum Income Plus Reit 99.3
Chelverton Growth Trust 62.5
JZ Capital Partners 52.2
Chelverton UK Dividend Trust 44.2
BMO Private Equity Trust 43.8
Ingot Capital Management Property Limited UIL Limited 43.7
River & Mercantile UK Micro Cap 40.7
Geiger Counter 40.4
Vietnam Holding Limited 38.5

Source: FE Analytics. Data from 1 January 2021 to 1 July 2021. VCTs and unclassified sectors excluded.  

Gold funds fall out form 

At the other end of the table, gold funds lost their lustre in the first half of 2021 and were among the worst performers. ES Baker Steel Gold & Precious Metals, LF Ruffer Gold and Ninety One Global Gold are down 14.3%, 13.1% and 12%.

The sluggish performance for such funds comes despite increasing investor concerns over higher inflation. In theory, rising levels of inflation should bode well for gold. The precious metal has historically provided a hedge against inflation. This is because governments and central banks cannot simply print more gold, as they can currencies. As a result, its value is preserved.

The three worst fund performers in the first half were VT Garraway Absolute Equity, LF Equity Income and Aviva Investors European Property, with losses of 34.4%, 33.3% and 25.6%.

Investors in the LF Equity Income fund, formally named the LF Woodford Equity Income fund and managed by Neil Woodford, have so far received around 80% of the assets from payments following sales of the fund's holdings.

For investment trusts, specialist strategies dominated the worst performers, with the bottom three being DP Aircraft I Limited (LSE:DPA), NB Distressed Debt Investment and Amedeo Air Four Plus Limited (LSE:AA4), with losses of 40%, 30.1% and 25.6%.

DP Aircraft I Limited and Amedeo Air Four Plus are aircraft leasing funds, while NB Distressed Debt Investment backs “stressed, distressed and special situation credit-related investments”. Both were the worst-performing trusts of 2020

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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