UK funds and trusts focusing on the small-cap end of the market have made the highest returns over the time David Cameron has been prime minister, the latest FE Trustnet figures show, with the likes of Fidelity UK Smaller Companies, R&M UK Equity Smaller Companies and Rights & Issues Investment Trust topping the performance tables. 
Cameron, who first became the country’s leader on 11 May 2010, stepped down today to hand over the reins to former home secretary Theresa May. He announced that he would be resigning as prime minster on 24 June, the day after the UK voted to leave the European Union.
While more affects markets than just who’s jangling the keys to Number 10 in their pockets, the past six or so years have seen a number of important events take place.
The first hung parliament in 26 years, the first coalition government since the Second World War after Cameron’s Conservative Party was forced to team up with the Liberal Democrats, the austerity drive, the Scottish independence referendum, Royal Mail’s privatisation and, most recently, the Brexit referendum and its surprise Leave victory are just some of the market-moving events to have taken place under Cameron.
FE Analytics shows that the FTSE All Share made a 62.46 per cent total return over the time Cameron was prime minister. The FTSE 100 made just 56.41 per cent, while the FTSE 250 gained 99.27 per cent and the FTSE Small Cap was up 88.66 per cent.
Performance of indices over Cameron’s prime ministership
Source: FE Analytics
The FTSE 100 also did a decent job when compared with other global indices. While it lagged the 130.30 per cent made by the S&P 500 and the 89.42 per cent from the MSCI World, it beat the MSCI Emerging Markets index (which is up just 17.17 per cent) and the Euro STOXX with its 48.69 per cent gain; it only narrowly lost out to the Topix.
Looking at just the three main Investment Association UK equity sectors shows that the average IA UK Smaller Companies fund has made 101.26 per cent, the average IA UK Equity Income fund is ahead 73.93 per cent and the IA UK All Companies sector has gained 66.56 per cent.
Over in the Association of Investment Companies universe, IT UK Smaller Companies trusts made a 126.12 per cent total return on average, IT UK Equity Income 81.18 per cent and IT UK All Companies 59.43 per cent.
The below table shows the 15 open-ended funds and the 15 investment trusts that made the highest total returns while Cameron was resident in 10 Downing Street.
Source: FE Analytics
Of the 15 Investment Association funds, nine come from the IA UK Smaller Companies sector with FE Alpha Manager Alex Wright topping the table with his Fidelity UK Smaller Companies fund. R&M UK Equity Smaller Companies, Liontrust UK Smaller Companies, AXA Framlington UK Smaller Companies and Marlborough Special Situations also appear and, like Wright’s fund, were highlighted in a recent FE Trustnet article on the best funds from that particular sector.
Interestingly, there are no current IA UK Equity Income funds in the 15 best performers. The first one to appear - MI Chelverton UK Equity Income, which has a small-cap bias – is in 36th place.
IA UK All Companies funds are well represented, accounting for the remaining six on the table above.
FE Alpha Manager Mark Martin’s Neptune UK Mid Cap fund is highest returner from this sector, reflecting the fact that mid-caps have been the best place to be for large parts of Cameron’s prime ministership. Martin runs his portfolio with a process that tries to protect on the downside, which has generally worked over the period in question and aided total returns.
Performance of fund vs sector and index under Cameron as prime minister
Source: FE Analytics
On the investment trust side of things, the top five highest returners - Rights & Issues, GVQ Strategic Equity Capital, Chelverton Growth, Small Companies Dividend and Henderson Smaller Companies – focus on smaller companies (although Small Companies Dividend is in the IT UK Equity Income sector).
Jupiter UK Growth is the first IT UK All Companies trust to appear on the list, but it is a relatively new entrant to the sector having previously been a global portfolio. Of the all-companies trusts that have solely focused on UK equities, JP Morgan Mid Cap is the highest ranking after the FTSE 250’s stellar run.
Of course, Cameron’s prime ministership can be split into halves – 11 May 2010 to 8 May 2015 when he was prime minister of the Conservative/Lib Dem coalition and 8 May 2015 to 13 July 2016 when he was in charge of the Conservative majority government.
Many of the same funds and trusts from the overall period can be found on the list of highest returners under the coalition – reflecting the fact that it’s a period that is five times as long so the bulk of returns were made here.
Performance of funds vs index under Cameron’s majority government
Source: FE Analytics
However, there are a few changes when the time under Cameron’s majority government is examined. Most notably there’s three new funds at the top of the Investment Association list: MFM Bowland, MFM Techinvest Special Situations and CFP SDL UK Buffettology.
