Interactive Investor

ii Super 60 performance review 2022

Discover how interactive investor’s rated funds performed in the three months to the end of December and for 2022 as a whole.

The performance of funds on the Super 60 investments list over 2022 have clearly reflected market conditions. With fixed income markets struggling in the face of rising rates, and areas within equity markets also coming under pressure, there were just 14 funds that ended the year in positive territory. Bright spots included commodities and value-biased equities, including higher-yielding names deemed to be more defensive. At the other end of the scale were strategies regarded as higher risk, particularly those with growth or smaller-cap biases.

The increase in many commodity prices benefited the WisdomTree Enhanced Cmdty ETF (LSE:WCOB), which was the top-performing fund on the list, delivering an absolute return of 27% over 2022. This exchange-traded fund (ETF) provides investors with exposure to four broad commodity sectors, namely energy, agriculture, industrial metals, and precious metals (plus up to 5% in bitcoin), primarily through futures contracts. Energy, where the fund has approximately 31% exposure, was a significant contributor as supply was abruptly constrained by the war in Ukraine and prices soared, while other areas of the portfolio also benefited from inflationary pressures.

Murray International (LSE:MYI) investment trust was the next strongest performer on the list. This global equity fund is managed by an experienced and extremely long-tenured team and offers investors a value-biased portfolio that emphasises income. These attributes have been favoured by the market over the past year, but the strength of the share price return has been considerably enhanced by demand for the shares. This has seen the share price ending the year at a premium to net asset value (NAV), having started 2022 at a discount, and has contributed over 10% to returns.

Returning to commodities, in sterling terms the iShares Physical Gold ETC GBP (LSE:SGLN) showed a strong positive return of 12% for the year. It aims to provide investors with exposure to the gold spot price through investment in responsibly sourced gold bars that meet the London Bullion Market Association’s rules and has generally succeeded in producing performance in line with the LBMA Gold Price. Gold was close to flat over the year in USD terms, with fluctuations seen across the year as the positive of its defensive characteristics, and potential inflation protection battled against the strengthening USD and rising rates, which made fixed-income assets increasingly more attractive.

The final two funds rounding out the top five performers on the Super 60 both benefited from the strength of UK equity income stocks over the year, reflecting value and defensive characteristics. City of London Ord (LSE:CTY) is managed in a cautious manner, with a focus on well-managed companies with robust balance sheets and provides investors with a relatively high level of income. The asset value of the trust increased over the year and was boosted further by the premium expanding as demand grew for the fund in the face of relatively favourable conditions for the strategy. Similarly, the Vanguard FTSE UK Equity Income Index fund benefited from a tailwind, with its overweight exposure to areas such as banks, tobacco, materials and utilities all contributing positively.

At the other end of the performance table was Scottish Mortgage Ord (LSE:SMT). With uncertainty breeding caution throughout much of 2022, investors punished the high valuations of the “blue sky” growth companies that this fund has always sought. Such stocks require belief in high levels of growth over the longer term to justify their valuations and, in 2022, few investors had the confidence to take such views. The trust saw a share price decline of over 45% during 2022, however, despite this recent weakness it should be remembered that this fund has shown exceptionally strong returns in more favourable market conditions and performance remains well ahead of benchmark over the past three years.

Baillie Gifford manages both Scottish Mortgage and another poorly performing trust Baillie Gifford Shin Nippon Ord (LSE:BGS)which is a smaller-cap Japan equity fund. Again, this fund has a relatively extreme growth bias, and in conjunction with the small-cap focus and an element of gearing, it is unsurprising to see the trust perform poorly over the calendar year.

Property is another area of the market that has come under pressure during 2022. Rising rates have caused capital values to come under pressure in the face of the increased attractiveness of fixed income, while recessionary fears have caused further concerns over vacancies and demand, particularly in the retail and office spaces. TR Property (LSE:TRY) has come under pressure in this environment and has seen a share price decline of over 35%.

The final two investments on the list of weakest performers are both smaller companies’ funds. With investor concerns providing a relative boost to larger, more established, and financially secure companies, small-cap names have seen weakness across regions during 2022. The abrdn Global Smaller Companies fund leverages the group’s proprietary quantitative matrix and this plus the subsequent fundamental analysis results in the portfolio showing a growth bias. The large-cap, value-driven market of 2022 was therefore likely to result in relative weakness for the strategy, which has shown success in less unfavourable conditions.

Similarly, Henderson Smaller Companies Ord (LSE:HSL) saw a loss of over 30%, which reflects an element of gearing and the impact of the growth bias as well as the weakness at the lower end of the UK market. The trust continues to be managed by an experienced team and remains ahead of its benchmark over the longer term.

Top five Super 60 funds in Q4 2022

Group/Investment3 Month1 Year3 Years5 Years
The European Smaller Companies Trust (LSE:ESCT)20.26-14.6732.0910.84
Henderson Smaller Companies Ord (LSE:HSL)18.31-30.10-17.296.93
Murray International (LSE:MYI)15.1420.6822.5433.01
Man GLG Income Professional Inc D15.025.024.1917.53
Royal London UK Equity Income M 13.352.355.6818.25

Bottom five Super 60 funds in Q4 2022

Group/Investment3 Month1 Year3 Years5 Years
Scottish Mortgage Ord (LSE:SMT)-7.42-45.7026.2464.79
Artemis US Smaller Companies I Acc GBP-5.41-19.3818.2756.92
WisdomTree Enhanced Cmdty UCITS ETF USD-4.4927.3460.2158.15
Jupiter Merian North Amer Eq I GBP Acc -1.91-6.4637.8660.36
M&G Global Macro Bond GBP I Acc-1.48-3.231.129.45

Source: Morningstar Total Returns for OE funds / Market Returns for ITs to 31/12/2022.

Top five Super 60 funds for a five-year period

Group/Investment3 Month1 Year3 Years5 Years
Premier Miton US Opportunities B Acc-0.11-4.3845.3173.37
Vanguard U.S. Eq Idx £ Acc-0.62-9.6633.2567.50
FTF ClearBridge Global Infras Inc WAcc0.067.7031.8166.13
Scottish Mortgage Ord (LSE:SMT)-7.42-45.7026.2464.79
Fundsmith Equity I Acc3.13-13.7124.8860.66

Bottom five Super 60 funds for a five-year period

Group/Investment3 Month1 Year3 Years5 Years
Vanguard UK Govt Bd Idx £ Dist1.47-27.08-24.60-18.68
Balanced Commercial Property Ord (LSE:BCPT)11.94-11.75-12.86-18.63
Baillie Gifford Shin Nippon Ord (LSE:BGS)-0.58-30.45-14.52-13.65
TR Property Ord (LSE:TRY)4.88-35.55-29.95-8.67
PIMCO GIS GlInGd Crdt Instl GBPH Acc2.63-16.28-13.85-7.05

Source: Morningstar Total Returns for OE funds / Market Returns for ITs to 31/12/2022.

Most-bought Super 60 funds in 2022

Most-sold Super 60 funds in 2022

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

There were no constituent changes to the Super 60.

We put one fund under review in December – iShares Environment & Low Carbon Tilt Real Estate fund (UK) (previously named iShares Global Property Securities Equity Index Fund). This was on the basis of a change of benchmark and name of the fund to incorporate certain environmental, social and governance (ESG) considerations. The fund has been placed under review until the impact of the changes are fully assessed.

Super 60 videos in Q4

GAM Star Credit Opportunities

The bond sector with 10% yields

‘Yields have doubled – now we’re getting stock-like returns from bonds’

F&C Investment Trust

F&C: why we’ve been selling US tech stocks

Stock picking secrets of the world’s oldest investment trust

R&M UK Recovery

The UK shares that will profit from Liz Truss’ tax reforms

‘Best time to buy British shares since the global financial crisis’

Diverse Income Trust

Top tactics to find resilient dividend shares

Two cheap shares I am backing to bounce back

Henderson Smaller Companies Investment Trust

Four stocks that are recession winners

The UK small-cap bargains I’ve been buying

Artemis Monthly Distribution

Why the 60/40 portfolio still makes sense

How we invest to pay a monthly income

The Super 60 investments list has been selected by investment experts to help narrow down the wide choice of available investment products. We believe it represents a set of high-quality choices, across different asset classes, regions, and investment types.

However, you should note that the selection of Super 60 investments list is not a ‘personal recommendation’. This means we have not assessed your investment knowledge, your financial situation (including your ability to bear losses), your investment objectives, your risk tolerance, or your sustainability preferences.

You should ensure that any investment decisions you make are suitable for your personal circumstances, and if you are unsure about the suitability of a particular investment or think you need a personal recommendation, you should speak to a suitably qualified financial adviser.

The past performance of an investment is not a reliable indicator of future results, and ii does not guarantee or predict the future performance of the Super 60 investments list as a whole or the constituent investments.

Risk Warning(s)

The value of your investments may go down as well as up. You may not get back all the money that you invest.

Investing in emerging markets involves different risks from developed markets, in many cases the risks are greater.

The value of international investments is affected by currency fluctuations which might reduce their value in sterling.

Disclosure(s)

All funds listed are the Accumulation version of the fund, where available, where any income generated within the fund is reinvested automatically. Income versions of these funds may also be available for investors looking for income generated to be paid directly into their account.

Annual performance can be found on the factsheet of each fund, trust or ETF. Simply click on the asset’s name and then the performance tab.

Any changes to the Super 60 investments list and the rationale behind those decisions will be communicated through the Quarterly Investment Review.

Details of all Super 60 recommendations issued by ii during the previous 12-month period can be found here.

ii adheres to a strict code of conduct. Members of ii staff may have holdings in one or more Super 60 investments, which could create a conflict of interest. Any member of staff involved in the development of research about any financial instrument in which they have an interest are required to disclose such interest to ii. We will at all times consider whether such interest impairs the objectivity of the recommendation.

In addition, staff involved in the production of the Super 60 investments list are subject to a personal account dealing restriction. This prevents them from placing a transaction in the specified instrument(s) for five working days before and after an investment is included or amended and made public within the Super 60 investments list. This is to avoid personal interests conflicting with the interests of investors in the Super 60 investments.