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The funds and trusts hit hardest during “Black Monday”

25 August 2015

Using FE Analytics, we highlight the funds and investment trusts that endured the biggest losses yesterday when indices across the world, including the FTSE 100, plummeted following China fears.

By Lauren Mason,

Reporter, FE Trustnet

It won’t have escaped investors that the FTSE 100 plunged by 4.7 per cent by close of play yesterday, wiping a total of £74bn off the blue-chip index.

The fall, which was the worst seen in six years, was triggered by concerns surrounding China as fears of an economic slowdown, the bursting of the ‘A’ shares bubble and the devaluation of its currency have continued to take its toll on investor sentiment.   

Performance of indices in 2015

Source: FE Analytics

Investors are now questioning the future of the funds and trusts in their portfolio and, as to be expected, there have been some significant sell-offs across the board.

Out of the 470 Investment Association funds that are in within the major UK sectors, only 45 saw positive returns yesterday according to FE Analytics. Most of those were bonds funds with the highest sensitivity to interest rates, which benefitted from falling inflation expectations.

The UK fund that saw the biggest gain, for example was three crown-rated Baillie Gifford Active Index-Linked Gilt Plus, which provided a return of 0.95 per cent yesterday and has gained 6.4 per cent since the start of the year.

Other funds that saw some of the biggest gains yesterday were Scottish Widows Gilt, Scottish Widows UK Fixed Interest Tracker, AXA Sterling Long Gilt and Threadneedle UK Fixed Interest.

The UK fund that saw the biggest losses, however, was Aviva Investors UK Equity Manager of Manager 5, which has two FE Crowns and is £70.9m in size. Since yesterday, the fund has lost 5.74 per cent and has lost 5.08 per cent since the start of the year, underperforming its IA UK All Companies sector by 5.14 percentage points.

Performance of fund vs sector in 2015

Source: FE Analytics

Managed by the Aviva Investors UK Fund Services team , the fund has also been bottom-quintile over one and five years, and has a bottom-quintile annualised volatility, maximum drawdown and downside risk since the team took charge in 2008.

Other UK funds that also lost in excess of 5 per cent yesterday include MFM Slater Recovery, Aviva Investors UK Equity Manager of Manager 3, Halifax UK FTSE 100 Index TrackingBaillie Gifford UK Equity Alpha and Threadneedle UK Growth.


Source: FE Analytics

In terms of trusts, not one of the 67 closed-ended investment vehicles within the four main IT UK sectors made a profit yesterday.

The losses have also been much more extreme, with the four FE Crown-rated Acorn Income losing the most at 7.82 per cent.

Managed by Paul SmithFraser Mackersie and Simon Moon, the trust has performed strongly since the start of the year but has plummeted by 13.18 per cent over the past week. Despite this, it has still outperformed its peer average in the IT UK Equity & Bond Income sector and its Numis Smaller Companies Extended Income Investment Companies benchmark year-to-date by 7.73 and 4.4 percentage points respectively to achieve a 12.17 per cent return.

The only other trust to lose more than 7 per cent yesterday was the Value & Income Trust, which is £112.5m in size and has two FE Crowns.  

However, the trust has also found itself in the bottom decile over one year as well as bottom quartile over the last decade.


The Value & Income trust is currently trading on a 16.8 per cent discount, is 28 per cent geared and yields 4.2 per cent.

Six more investment trusts lost more than 6 per cent yesterday – Henderson Smaller Companies Investment Trust, Artemis Alpha Trust, Henderson Opportunities Trust, Dunedin Smaller CompaniesAberdeen UK Tracker Trust and JP Morgan Claverhouse.

Stepping away from the UK and looking at funds in all regions, it will come as no surprise given that the sell-off originated out of China that emerging market open-ended and closed-ended funds have suffered the biggest losses since yesterday.

Interestingly, it is India funds within the Investment Association universe that have seen the largest losses, with the five crown-rated GS India Equity Portfolio plummeting by 10.27 per cent and losing the most overall.

The fund sits in the IA Specialist sector and has significantly outperformed its MSCI India benchmark over one, three and five years.

Performance of fund vs benchmark over 5yrs

Source: FE Analytics

BlackRock GF India, JPM India, Invesco India Equity, HSBC GIF Indian EquityJGF Jupiter India Select and Jupiter India are all the next biggest losers, with the exception of BlackRock Asian Dragon, which found itself sixth from-the-bottom of the performance list with a loss of 8.71 per cent.

Apart from these, there were six other funds that lost more than 8 per cent yesterday, and these included GS BRICs Portfolio, GS Asia PortfolioJPM Hong Kong and GS Japan Portfolio.

Over on the closed-ended side, there is less of a distinctive pattern in terms of the funds nursing the biggest hangovers from Black Monday.

Powerhouse Energy Group, which has an FE risk score of 2699 and has therefore been deemed to be more than 26 times risker than the FTSE 100, lost a staggering 20.34 per cent yesterday and saw the biggest loss out of all 414 trusts.  

However, the trust is only £5.7m in size and is unavailable on most investment platforms.

Performance of trust since launch

Source: FE Analytics

The next two worst-performing trusts were Raven Russia and the Ukraine Opportunity Trust, which lost 17.59 and 14.65 per cent respectively.

After Baillie Gifford Shin Nippon, which is managed by John MacDougall and lost 13.69 per cent, investment trusts continue to follow a similar pattern to open-ended funds, with India funds such as New India Investment Trust and India Capital Growth suffering the biggest losses out of its regional peers over Black Monday.

Within the two global sectors in the Investment Association universe, it’s interesting to note that the worst-performing fund yesterday was GS Global Responsibility Equity Portfolio, which only has a 2.81 weighting in Asia Pacific Emerging Equities and consists mostly of US, European, UK and Japanese stocks.


 The $37.3m fund, which lost 6.96 per cent, has also found itself in the bottom quintile over one year, as well as year-to-date.

Performance of fund vs sector and benchmark in 2015

Source: FE Analytics

The second-worst performing global fund yesterday was T. Rowe Price Global Focused Growth Equity, which holds at least 78.4 per cent in developed markets and has weightings of less than 1.5 per cent in South Africa, Asia Pacific, the Middle East and the Americas.

Unlike GS Global Responsibility Equity Portfolio, though, it has performed reasonably well in the past, delivering a top-quartile return over three years.

Other open-ended global funds that suffered losses in excess of six per cent yesterday include FP Russell International Growth Assets, GS Global Equity Unconstrained Portfolio, JPM Global FocusSchroder ISF Global Equity Alpha and T. Rowe Price Global Growth Equity.

In terms of investment trusts the pattern remains surprising, with the worst-performing global investment vehicle holding more than 99 per cent in developed markets and cash, which it holds a 2.42 per cent weighting in.

Majedie Investments, managed by Nick Rundle, lost 9.51 per cent yesterday. The trust is geared 23 per cent and is trading on a 4.5 per cent discount.

Henderson Global Trust saw the second-worst losses of 7.17 per cent and, alongside Majedie Investments, is the only global trust to have lost more than 7 per cent.

Managed by Wouter Volckaert, the one FE Crown-rated trust holds 8.2 per cent in the Pacific Basin, 13.7 per cent in Europe excluding the UK and 5.16 per cent in international markets aside from the US, the UK, Japan and Europe.

Henderson Global Trust isn’t geared though and is trading at a discount of 12.7 per cent.

Other global investment trusts that saw large losses yesterday were EP Global Opportunities Trust, Hansa Trust, Martin Currie Global Portfolio TrustEdinburgh Worldwide IT and Witan Investment Trust.

Moving onto ETFs, the funds that suffered the poorest performances were the leveraged ETFs and include Boost FTSE 100 3x Leverage Daily, ProShares Ultrapro Financials, Lyxor SG UCITS ETF MSCI CHINA AProShares UltraShort MSCI Pacific ex-Japan which all lost more than 14 per cent.

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Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.