Interactive Investor

Most funds lose money in April

3rd May 2022 13:44

Douglas Chadwick from ii contributor

Saltydog Investor crunches the numbers and finds only 5% of funds went up by more than 1% last month.  

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Last month, nearly all the world’s major stock markets made losses. The FTSE 100 bucked the trend and went up by 0.4%. It is one of the few indices showing a gain so far this year.

Stock market indices

Index Country January 2022 February 2022 March 2022 April 2022 Year-to-date
FTSE 100 UK 1.1% -0.1% 0.8% 0.4% 2.2%
FTSE 250 UK -6.6% -3.9% 0.4% -2.1% -11.8%
Dow Jones Ind Ave US -3.3% -3.5% 2.3% -4.9% -9.2%
S&P 500 US -5.3% -3.1% 3.6% -8.8% -13.3%
NASDAQ US -9.0% -3.4% 3.4% -13.3% -21.2%
DAX Germany -2.6% -6.5% -0.3% -2.2% -11.2%
CAC40 France -2.2% -4.9% 0.0% -1.9% -8.7%
Nikkei 225 Japan -6.2% -1.8% 4.9% -3.5% -6.8%
Hang Seng Hong Kong 1.7% -4.6% -3.2% -4.1% -9.9%
Shanghai Composite China -7.6% 3.0% -6.1% -6.3% -16.3%
Sensex India -0.4% -3.0% 4.1% -2.6% -2.0%
Ibovespa Brazil 7.0% 0.9% 6.1% -10.1% 2.9%

Data source: Morningstar. Past performance is not a guide to future performance.

The FTSE 250, which is probably a better indicator of the UK economy, fell by 2.1% in April and is now nearly 12% lower than it was at the beginning of the year.

In the US, the largest economy in the world, the situation is even worse. Last month, the Dow Jones Industrial Average fell by 4.9%, the S&P 500 went down by 8.8% and the Nasdaq lost 13.3%.

The Nasdaq, which is the benchmark index for US tech stocks, went up by 21.4% in 2021. In the first four months of this year, it has fallen by 21.2%. It is easy to think that means it is now back where it was at the beginning of 2021, but that is not the case. If you take 100 and increase it by 21.4% you get 121.4. If you take 121.4 and reduce it by 21.2% you actually get 95.7. That means that the Nasdaq is now 4.3% lower than it was at the start of last year.

The Brazilian Ibovespa is the only other index in our table that is showing a gain in 2022, but it went down by 10.1% in April.

As you would expect, our latest Investment Association (IA) sector performance analysis shows most sectors making losses in May.

In our summary table, we group all the non-UK bond sectors together in our Global & Global Emerging Bonds sector. As a whole it went down by 1.4%, but US Government Bonds went up by 2.3%, US Mixed Bonds made 1.4%, US High Yield Bonds gained 1.0%, and US Corporate Bonds rose by 0.8%.

The other sectors that made gains in April were India/Indian Subcontinent, up 2.3%; Infrastructure, up 1.2%; and UK Direct Property, up 1.0%.

IA sector returns: April 2022

Safe Haven % Rtn Full Steam Ahead - Developed % Rtn
Short Term Money Market 0.0 Global Equity Income -0.1
Standard Money Market 0.0 Europe Including UK -1.7
Slow Ahead % Rtn Europe Excluding UK -2.6
Mixed Investment 20-60% Shares -1.8 North America -3.1
Mixed Investment 0-35% Shares -1.9 Global -3.2
£ Strategic Bond -2.1 European Smaller Companies -3.5
Mixed Investment 40-85% Shares -2.2 North American Smaller Companies -4.5
£ High Yield -2.3 Japan -4.6
£ Corporate Bond -2.5 Japanese Smaller Companies -4.8
Steady as She Goes % Rtn Full Steam Ahead - Emerging % Rtn
UK Direct Property 1.0 Asia Pacific Excluding Japan -1.3
UK Equity Income -0.4 Global Emerging Markets -2.4
UK All Companies -1.2 China/Greater China -2.7
Global & GEM Bonds* -1.4 Asia Pacific Including Japan -2.8
UK Smaller Companies -2.0 Tech & Tech Innovations -7.3
Flexible Investment -2.1 Specialist / Thematic % Rtn
UK Gilts -2.5 India/Indian Subcontinent 2.3
UK Index Linked Gilts -5.2 Infrastructure 1.2
Data Source : Morningstar. Past performance is not a guide to future performance. Healthcare -3.0
* The Global & GEM bonds figure is calculated by taking an average of all the non-UK bond sectors Financials and Financial Innovation -4.4
Latin America -7.2

Morningstar, which calculates the performance figures, does not show averages for sectors “where performance comparisons may be inappropriate due to the diverse nature of the funds in the sector”. This includes the Specialist, Targeted Absolute Returns, and Commodities and Natural Resources sectors.

The best-performing fund from our demonstration portfolios (Tugboat and Ocean Liner) was the Schroder ISF Global Energy fund, which went up by 5.9%. Morningstar show it in the Global sector, but I would have thought that it could have gone into the Commodities and Natural Resources sector. We also hold the TB Guinness Global Energy fund, which is in the Commodities and Natural Resources sector and went up by 3.6% last month.

Less than 15% of the funds that we track went up in April, and only 5% went up by more than 1%. The worst-performing fund, Baillie Gifford American, went down by more than 18%.

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