However, the first half of 2014 has been disastrous for some stocks with several losing huge chunks of their value in the first half of the year.
One of the most disastrous performers of the year so far is the internet video platform Blinkx which has seen its share price plummet 82.58 per cent plummet. By comparison the FTSE All Share has remained broadly flat, rising just 0.47 per cent.
Performance of stock and index in 2014
Source: FE Analytics
Only one fund, the £19m Manek Growth fund managed by Jayesh Manek, names Blinkx as atop-10 holding, accounting for 10.4 per cent of its total assets.
There is a lesson to be learned from the performance of some of these stocks, according to Helal Miah (pictured), investment research analyst at The Share Centre.
“The message is: you shouldn’t chase stocks that are on such high multiples,” he said.
“There is some fear that this market is headed for a repetition of what happened in 2000 with tech stocks. The high number of IPOs on large valuations is quite scary and brings back memories of 2000 to me.”
“However, with a lot of these stocks it is just over-enthusiasm and a lot of momentum buyers going into the market and driving the share price up.”
“It may also be that investors are looking for alternative sources of income after several years of very low interest rates and are taking a punt on the market. There is nothing essentially wrong with this as long as you have a well-balanced portfolio. Investors should always take a small punt on something.”
Here we look at some of the worst performing stocks of the year and which funds hold them.
Morrisons
Morrisons is the worst performing FTSE 100 stock in 2014, down more than 30 per cent after losing trade discounters such as Aldi and Lidl.
Performance of stock and index in 2014
Source: FE Analytics
Five funds in the IMA universe hold Morrisons as a top 10 position, all of which are run by Schroders.
The £1.5bn Schroder Income fund is one of these. Its managers Kevin Murphy and Nick Kirrage are known for their deep-value style and have recently increased their position in the supermarket.
Kirrage and Murphy also hold the stock in their five crown-rated Schroder Charity Equity fund, Schroder Specialist Value UK Equity X and Schroder Recovery.
Thomas See's £1.2bn Schroder Income Maximiser fund has 3.37 per cent of its assets in Morrisons.
Another deep value and contrarian manager, Investec's Alastair Mundy bought into the stock in April, saying it was one of the only attractively valued stocks in the UK market.
ASOS
The online retailer has been the darling of the stock market in recent years, rising almost 8,000 per cent between 2008 and the end of last year and many fund managers held it in their top-10. However, in 2014 it lost more than half of these gains.
Performance of stock and index in 2014
Source: FE Analytics
Three FE Alpha Managers – Harry Nimmo at Standard Life Investments, Giles Hargreave at Marlborough and James Thomson at Rathbones – have completely sold out of the stock or heavily reduced their exposure to it recently.
Three managers currently hold the stock in their top-10. Gerrard Callahan of Baillie Gifford UK Equity Alpha and Douglas Brodie of Baillie Gifford Global Discovery have 4.6 and 1.8 per cent, of their assets in the stock.
FE Alpha Manager Richard Hallett, who runs the Marlborough UK Multi-Cap Growth fund, has 2.8 per cent of his portfolio in ASOS.
“ASOS still has very good growth prospects and at the current price it is starting to look attractive again for contrarian investors willing to stick their neck out,” Miah said.
WanDisco
This high profile tech company also saw a huge appreciation in its share price in the years between its initial public offering in June 2012 and the end of 2013, but it has since tanked and lost 53.66 per cent in 2014.
It had been tipped as a potential rival to Google but was one of the biggest victims of a sell-off in tech stocks in March this year and has continued to plummet ever since.
Performance of stock and index in 2014
Source: FE Analytics
Despite being widely held by FE Alpha Managers Andrew Jackson in the Ecclesiastical UK Equity Growth fund and Paul Marriage at Schroders, only one fund now holds it: FF&P Small Cap UK Equity.
The stock made up 3.09 per cent of the portfolio until recently but this figure has now diminished to less than 1 per cent.
Quindell
This insurance conglomerate started the year as one of the market’s prime growth stories, shooting up by more than 125 per cent in the first six weeks of 2014. It has since plummeted, and is down 40 per cent from the beginning of the year.
Performance of stock and index in 2014
Source: FE Analytics
Quindell's share price decline followed allegations of accounting malpractice, which it denies.
Four IMA funds hold it in their top-10. It makes up 2.7 per cent of Philip Wolstencroft's Artemis Capital fund and 2.2 per cent of Ken Hsia's Investec UK Smaller Companies fund.
Two FE Alpha Managers, Mark Slater and Daniel Hanbury, also own the stock.
Tom Dobell, manager of the £6.7bn M&G Recovery fund, had a 2.3 per cent weighting to the stock back in February when the malpractice allegations were made, but he told FE Trustnet he was sticking with the holding and had no plans to sell out.
Miah says until there is further transparency and clarity over the allegations against the company, it remains a hugely contrarian play.
