ii Super 60 fund review: Q3 2020

by Dzmitry Lipski from interactive investor |

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Find out how interactive investor’s list of rated funds performed over the summer months.

While markets continued their recovery in the third quarter, the majority of interactive investor’s Super 60 rated strategies delivered positive returns, both in absolute and relative terms. Medium and long-term performance remains strong, with 65% of the rated active portfolios being 1st and 2nd quartile in their peer group over three years, and 76% over five years respectively. Our rated passive funds continued to deliver consistent returns in-line with their benchmark, while also keeping the tracking error lower than the sector average, both over the short and long term.

Four investment trusts and one fund made up the top five best-performing strategies over the quarter.

Boosted by a strong rally among smaller companies, and those in Japan in particular, Baillie Gifford Shin Nippon (LSE:BGS) generated a 23% total return against 5% for the MSCI Japan Small Cap Index. That was followed by Scottish Mortgage (LSE:SMT) with 21% and Fidelity China Special Situations (LSE:FCSS) with 20%. Legg Mason Japan Equity, which also has reasonable exposure to the smaller companies theme, delivered 16% and TR European Growth returned 13% compared to 8% for the MSCI Europe ex UK Small Cap benchmark.

As the value style of investing continues its struggle to catch up with the broader markets, five income-focused strategies make up the bottom five performers of our rated list. Schroder Income, which uses a deep-value approach, delivered a negative total return of 9% over the quarter, followed by North American Income Trust (LSE:NAIT), Man GLG UK Income and City of London Investment Trust (LSE:CLIG), all of which declined by  6% in the third quarter. Royal London UK Equity Income completes the bottom five, recording a 4% loss over the last three months.

Over the long term, the best-performing strategies are very similar to those that delivered the highest returns in the third quarter. Scottish Mortgage has delivered an annualised return of 65% over five years, followed by Baillie Gifford Shin Nippon and Fidelity China Special Situations, with 45% and 40% respectively. Lindsell Train Investment Trust (LSE:LTI) takes fourth place with 32% and Legg Mason Japan Equity completes the top five with a 26% return over the same period.

Top five ii Super 60 funds in Q3

Investment Q3 (%) YTD 1 year 3 Years 5 Years
Baillie Gifford Shin Nippon 23.44 32.37 30.77 20.38 44.59
Scottish Mortgage 20.85 71.59 97.84 46.29 65.29
Fidelity China Special 20.07 46.72 55.51 20.16 39.81
Legg Mason IF Japan Equity 15.76 31.58 31.47 17.95 25.69
TR European Growth 12.56 -0.50 13.41 -3.52 17.30

Source: Morningstar Total returns in sterling

Bottom five ii Super 60 funds in Q3

Investment Q3 (%) YTD 1 year 3 Years 5 Years
Schroder Income Fund -8.78 -32.43 -28.48 -9.05 0.01
North American Income Trust -6.00 -24.78 -25.57 0.11 14.36
Man GLG Income Professional Inc -5.78 -27.71 -20.41 -4.91 2.72
City of London -5.83 -25.99 -21.06 -5.01 0.83
Royal London UK Equity Income -3.88 -24.97 -19.77 -4.60 2.30

Source: Morningstar Total returns in sterling

Most-traded funds on the ii platform in Q3

Scottish Mortgage (LSE:SMT)
Alliance Trust (LSE:ATST)
Fundsmith Equity
City of London (LSE:CTY)
iShares Core FTSE 100 ETF (LSE:ISF)
Scottish Mortgage (LSE:SMT)
iShares Core FTSE 100 ETF (LSE:ISF)
Fundsmith Equity
iShares Physical Gold ETC (LSE:SGLN)
Polar Capital Technology (LSE:PCT)

Changes to the ii Super 60 list (under review/developments)

There have been a number of changes to the interactive investor Super 60 list of investments recently. For more information, please click here:

Super 60 videos

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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