ii Super 60 performance review: Q3 2022
19th October 2022 09:23
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Discover how interactive investor’s rated funds performed in the three months to the end of September.
The best-performing fund on the Super 60 list was F&C Investment Trust Ord (LSE:FCIT). The trust is a highly diversified global equity strategy, with a modest level of gearing. Over the quarter, it delivered a share price return of 11.52%. However, from a net asset value (NAV) perspective the trust didn’t stand out, with a return of just 1% versus the market’s 1.4%. Its share price, therefore, moved from a 5.10% discount to a 2.42% premium – the largest swing among the Super 60’s investment trusts. The fund remains one of the best performing on the Super 60 list over the past few years.
From a NAV perspective, the top-performing fund was Artemis US Smaller Companies, which returned 10.8%, with US small-cap stocks the best-performing segment of the global equity sphere. The fund also did particularly well against its Russell 2000 benchmark, which only returned 6.41% in sterling terms. A large portion of this return was delivered in July, particularly from its holdings in industrial stocks. The fund is among the best performing within its smaller companies peer group over three years.
The third-best performing fund was Baillie Gifford’s flagship investment trust - Scottish Mortgage (LSE:SMT). The trust had a share price return of 9.37%, stemming some of the significant losses experienced over the preceding nine months. The bulk of this return came in July as an upturn in risk appetite was driven by hopes of a pivot on Federal Reserve interest rate policy, and stocks with higher growth profiles therefore performed very well.
In a similar vein, Baillie Gifford’s Japanese Smaller Companies Trust, Baillie Gifford Shin Nippon Ord (LSE:BGS), returned 8.87% having also struggled recently due to being at the more extreme end of the growth spectrum. Like the Artemis fund, the large allocation to industrials was the biggest driver here. It also has an element of gearing (currently circa 15%), which exacerbates any performance strength or weakness.
Rounding off the top five performers was Premier Miton US Opportunities, which achieved a return of 7.72%, while the S&P 500 index returned 3.35%. The fund currently has a large portion of its portfolio in mid-cap stocks, which outperformed large caps over the quarter. The fund remains one of the best performing on the list over the past few years.
Despite posting a positive NAV return of 0.81%, the worst-returning fund in the quarter was Balanced Commercial Property (LSE:BCPT) (formally known as BMO Commercial Property Trust), which was down -27.18% and moved from a discount to NAV of -19.16% to -45.88% by quarter end. A strong showing in the first half of 2022 moderates this loss over 12 months. The trust provides exposure to prime UK commercial property with a heavy bias towards central London and South East England.
In direct contrast to last quarter’s strong performance, Fidelity China Special Ord (LSE:FCSS) had a NAV and share price return of -15.09% and -21.24% respectively. Chinese equities were one of the worst performing globally amid a slowdown in activity indicators and the alarming spread of Covid-19 throughout China.
TR Property Ord (LSE:TRY), a pan-European REIT was down -19.97% over the quarter, only slightly more than its NAV, which was down -16.17%. It has struggled throughout 2022 but September was its worst month so far, down over 18%. The market narrative started to shift in August from that of inflation peaking to persistently high inflation, and against this backdrop, bond yields rose significantly, negatively influencing the valuations of pan-European property equities.
It is no surprise that the Vanguard UK Government Bond Indexfund was in the bottom five performing funds. With global government bond yields already rising aggressively over the past 12 months, the UK’s budgetary announcement at the end of September accelerated the sell-off in gilts as investors questioned the credibility of the government’s fiscal framework. The UK 10-year yield increased from 2.24% to 4.15% over the quarter.
Lastly, TB Amati UK Listed Smaller Companies had a negative return for the fourth consecutive quarter, making it the worst performing open-ended fund on the list over 12-months. The FTSE All-Share index has outperformed its developed market equivalents so far in 2022, however this is largely comprised of large-cap companies. Mid and small-cap companies, to which this fund is exposed, have underperformed, while there is also exposure to smaller AIM-listed companies that have fallen more than 30%.
Top five Super 60 funds in Q3 2022
| Performance (%) | Q3 2022 | 1 Year | 3 Years | 5 Years |
| F&C Investment Trust Ord | 11.52 | 6.25 | 33.45 | 60.08 |
| Artemis US Smaller Companies I Acc GBP | 10.80 | -15.72 | 26.46 | 73.80 |
| Scottish Mortgage Ord | 9.37 | -45.01 | 57.23 | 89.83 |
| Baillie Gifford Shin Nippon Ord | 8.87 | -37.54 | -15.05 | 4.67 |
| Premier Miton US Opportunities B Acc | 7.72 | 1.16 | 45.43 | 84.08 |
Bottom five Super 60 funds in Q3 2022
| Performance (%) | Q3 2022 | 1 Year | 3 Years | 5 Years |
| Balanced Commercial Property Ord | -27.18 | -13.09 | -21.81 | -33.04 |
| Fidelity China Special Ord | -21.24 | -28.07 | 7.72 | 11.16 |
| TR Property Ord | -19.97 | -34.63 | -22.32 | -3.41 |
| Vanguard UK Govt Bd Idx £ Dist | -14.28 | -26.13 | -29.10 | -18.11 |
| TB Amati UK Listed Smaller Coms B Acc | -11.17 | -32.35 | 2.15 | 14.46 |
Source: Morningstar Total Returns for OE funds / Market Returns for ITs to 30/09/2022.
Top five Super 60 funds for a five-year period
| Group/Investment | Q3 2022 | 1 Year | 3 Years | 5 Years |
| Scottish Mortgage Ord | 9.37 | -45.01 | 57.23 | 89.83 |
| Premier Miton US Opportunities B Acc | 7.72 | 1.16 | 45.43 | 84.08 |
| Vanguard U.S. Eq Idx £ Acc | 3.75 | -1.30 | 35.89 | 77.53 |
| Artemis US Smaller Companies I Acc GBP | 10.80 | -15.72 | 26.46 | 73.80 |
| Jupiter Merian North Amer Eq I GBP Acc | 3.63 | 3.06 | 40.89 | 73.44 |
Bottom five Super 60 funds for a five-year period
| Group/Investment | Q3 2022 | 1 Year | 3 Years | 5 Years |
| Balanced Commercial Property Ord | -27.18 | -13.09 | -21.81 | -33.04 |
| Vanguard UK Govt Bd Idx £ Dist | -14.28 | -26.13 | -29.10 | -18.11 |
| PIMCO GIS GlInGd Crdt Instl GBPH Acc | -3.90 | -18.90 | -15.44 | -8.94 |
| Rathbone Ethical Bond I Acc | -9.57 | -22.77 | -14.52 | -5.99 |
| Vanguard Glb Bd Idx £ H Acc | -4.48 | -14.71 | -12.62 | -5.56 |
Most-bought Super 60 funds in Q3 2022
| Company name |
| Scottish Mortgage |
| Fundsmith Equity |
| City of London |
| Vanguard LifeStrategy 80% Equity |
| F&C Investment Trust |
Most-sold Super 60 funds in Q3 2022
| Company name |
| Scottish Mortgage |
| Fundsmith Equity |
| iShares Physical Gold ETC |
| Vanguard LifeStrategy 80% Equity |
| City of London |
Changes to the Super 60 list (under review/developments)
None in Q3.
Super 60 videos in Q3
City of London
Two FTSE 100 high-yielding shares that stand out from the crowd
Three cheap shares I’ve bought for City of London Investment Trust
R&M UK Recovery
‘Best time to buy British shares since the global financial crisis’
The UK shares that will profit from Liz Truss’ tax reforms
Jupiter Strategic Bond
An 8% bond yield and the ‘biggest opportunity’ for years
Why interest rates will fall in 2023 and how we are profiting
The Super 60 investments list is selected and managed by our independent research partner Morningstar and reviewed by our in-house 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.