How these 11 'wildcard' fund and trust tips for 2019 fared
Kyle Caldwell crunches the numbers to find out how our experts’ ‘wildcard’ tips turned out in 2019.
17th December 2019 14:20
by Kyle Caldwell from interactive investor
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We crunch the numbers to find out how our experts’ ‘wildcard’ tips turned out in 2019.
Crystal ball-type predictions are no panacea. Far from it; they are simply opinions ultimately based on guesswork. However, given the huge array of fund and investment trust options at investors’ disposal, Money Observer has, for a number of years now, drawn on the expertise of some of the best fund and investment trust analysts in the business. The aim is to offer readers food for thought on the best opportunities at the start of each calendar year.
For our 2019 tips, alongside the growth and income selections, a “wildcard” category was introduced. The motivation was to seek out left-field tips that should appeal to contrarian-minded investors looking for bargain value opportunities. The wildcard selections were mainly funds and trusts that had been underperforming, but which our experts nonetheless backed to return to form in 2019.
Our panellists did well with their wildcard choices overall, with nine of the 11 picks up over the year to 28 November and returns ranging from 6.8% to 25.5%. Top of the tree was GVQ UK Focus, which adopts a private equity lens to evaluate the credentials of UK businesses. It was tipped by BMO’s Kelly Prior, who remarked: “The managers believe the fund offers excellent value after a tough recent period.” This certainly rang true in 2019.
In the second spot was Aberdeen Standard Investments’ ASI Europe ex UK Smaller Companies , which returned 19.3%. Fundexpert’s Brian Dennehy described the fund as “beaten up”, but he backed it to recover in 2019. He said at the time:
“This isn’t bottom-fishing. We know smaller companies tend to outperform. If you can buy into a huge universe of opportunities when the sector is beaten up, why wouldn’t you?”
Similarly, the third-best performer, River & Mercantile Global Recovery, bounced back, following a lacklustre 2018, as predicted by Square Mile’s Jason Broomer. He said:
“Manager Hugh Sergeant has good experience in investing in recovery-type situations, and this fund could be highly rewarding for investors with a longer-term investment horizon.”
Six other wildcard picks did well, although volatility was notably lacking in 2019.
Unfortunately, one bad apple has soured our wildcard performance. Woodford Patient Capital IT (LSE:WPCT) has endured a torrid time and is deep in the red, having lost 64.2% in the year to 28 November. BMO’s Peter Hewitt predicted that performance would pick up in 2019. Indeed, we also have to hold our hands up, as Woodford Patient Capital was a Rated Fund at the start of 2019 until the open-ended Woodford Equity Income fund was suspended in early June.
Woodford woe
A week after Neil Woodford closed his fund management firm and stepped down as manager of the trust, it was announced that Schroders will be at the helm by the end of 2019. It will manage the trust in line with its current investment objective of investing in quoted and unquoted UK firms.
Analysts are cautious, a stance our panellists are also adopting – a Woodford wildcard tip at the start of 2020 is conspicuously lacking.
Beyond our wildcard picks, the most notable success was JPMorgan Russian Securities (LSE:JRS), which saw its share price soar by 48%. John Newlands described the trust as his “contrarian choice”, adding that its wide discount of 17% “offers useful downside protection”.
Another astute call was Liontrust’s John Husselbee’s tip to boost exposure to gold at the start of 2019. He tipped BlackRock Gold and General, which has gained 23%.
How our 2019 wildcard fund and trust tips fared
Source: FE Analytics. Data from 1 January 2019 to 28 November 2019
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.
This article was originally published in our sister magazine Money Observer, which ceased publication in August 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.
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.