UK equity funds triumph post-financial crisis
All but a handful of funds have now eradicated the losses sustained in the aftermath of the Lehman Brothers crash.
UK equity funds dominate the best-performers list over a three-year period, according to FE Trustnet
Of the 20 IMA funds with the highest returns, 13 sit in the UK All Companies
, UK Equity Income
or UK Smaller Companies
sectors. Majedie Special Situations – another UK-focused portfolio which is part of the IMA Unclassified sector – also features on the list.
Top-20 best performing funds over 3-yrs
Source: FE Analytics
It is almost three years to the day that the FTSE 100 fell to a six-year low of under 3,700, but since the lows of mid-March 2009 the index has rallied by more than 60 per cent.
While the knock-on effects of the global financial crisis are still being felt, in general it has been a good three years to be invested in IMA funds, with the average portfolio up 53.8 per cent. Only 27 funds have suffered losses over the period.
A handful of emerging market small cap funds make it into the top-20 list, but UK equity funds are the standout performers overall – particularly those with a small cap focus. Eight of the 13 UK equity funds sit in the UK All Companies sector, while Unicorn UK Equity Income – the only UK Equity Income fund on the list – has a bias to small and mid cap companies.
Newly-appointed FE Alpha Manager Deryck Noble-Nesbitt
is the standout manager, with two funds making it into the elite group. Close Beacon Investment and Close Special Situations have returned 190.07 and 173.63 per cent over a three-year period, vastly outperforming the average UK Smaller Companies portfolio.
Performance of funds vs sector and index over 3-yrs
Source: FE Analytics
The 20 funds on the list are typically high-Alpha funds, which added vastly more value than their respective benchmarks during the 2009 to 2010 QE-fuelled rally and the recent surge in markets. The one exception to this rule is perhaps the Baring ASEAN Frontiers portfolio, which has only marginally outperformed its MSCI South East Asia index over the period.
Many managers paid the price for their high-conviction approach during the 2011 blip, however, with half of the funds losing in excess of 10 per cent over the course of the calendar year.
While the vast majority of funds are more volatile than their peer group, four funds – Unicorn UK Income, CF Amati UK Smaller Companies, Marlborough UK Micro Cap Growth and Aberdeen Global Asian Smaller Companies – have been less volatile than their respective sector averages.
According to FE data, the $1.6bn Aberdeen Global Asian Smaller Companies fund is the second least volatile fund in its entire IMA Asia Pacific ex Japan sector over three years, in spite of its bias to smaller, more illiquid companies.