Best performing funds and investment trusts – Q1 2021

Laith Khalaf
6 April 2021

•    UK funds enjoy a quarter at the top of the performance table
•    ‘Safe’ bonds drop sharply
•    Energy funds, resource funds and REITs bounce back

Laith Khalaf, financial analyst at AJ Bell, comments:

“The first quarter of the year saw a resurgence of some areas of the market which have been badly beaten up by the pandemic, as investors look forward to life beyond COVID. Funds investing in commodities and even UK shopping centres posted a decent quarter of performance, though the REITs Drum and Hammerson are still significantly down on their pre-pandemic levels.

“Funds investing in the US continued to do well, with the S&P 500 now having broken through the 4,000 mark for the first time. UK equity funds also enjoyed a rare glimpse of the top of the performance tables, thanks in part to the cyclical make-up of the UK stock market, and the reassessment of the prospects for these economically sensitive stocks that has taken place since the arrival of effective vaccines. 

“Many retail investors are still fleeing the UK stock market however, with £1.7 billion withdrawn from UK equity funds in January and February, according to Investment Association data. These investors could find themselves missing out on a resurgent UK stock market, if the global economy performs as expected this year, as the banks and commodity stocks that play such a big part in the FTSE 100 should do well in an expansionary economic environment.

“At the other end of the performance table, fixed income funds had a dismal quarter, as markets ditched safe haven assets in anticipation of brighter economic climes. Of particular concern to UK investors is the big drop in gilt funds, as these are prized by investors seeking a safe haven for their money, and a 7.4% fall in three months doesn’t precisely fit that billing. If risk appetite continues to increase with the global vaccine roll out, and markets start looking forward to potential interest rate rises, recent falls could be the thin end of the wedge for UK government bonds. These assets do still provide some diversification, and they will hold up well if the pandemic or the economy takes a turn for the worse. But based on the high prices and low yields currently on offer in the market, the long term prospects for gilt funds don’t look good.”
 

Best performing Investment Association fund sectors Q1 2021

 

Sector

Q1 performance %

Sector : IA UK Smaller Companies

9.0

Sector : IA North American Smaller Companies

6.9

Sector : IA UK Equity Income

6.8

Sector : IA UK All Companies

5.8

Sector : IA North America

5.0

 

 

 

 

 

 

Sector : IA Global EM Bonds Hard Currency

-4.3

Sector : IA Global EM Bonds Blended

-4.6

Sector : IA UK Index Linked Gilts

-6.7

Sector : IA UK Gilts

-7.4

Sector : IA Global EM Bonds Local Currency

-8.1

Source: FE Total return 31/12/2020 to 31/03/2021

 

 

Best performing funds Q1 2021

 

 

Q1 Performance %

Schroder ISF Global Energy

25.2

M&G Japan Smaller Companies

22.9

VT De Lisle America

22.7

Guinness - Global Energy

20.5

Premier Miton UK Smaller Companies

20.4

Aberforth UK Small Companies

19.8

VT Cape Wrath Focus

19.3

TM RWC UK Equity Income

17.1

Barings Global Agriculture

17.1

Legg Mason IF ClearBridge US Equity

17.0

Source: FE Total return 31/12/2020 to 31/03/2021, sterling denominated funds only

 

 

Best performing investment trusts Q1 2021

 

 

Q1 performance %

All Active Asset Capital Limited

184.9

Agronomics Limited

135.8

Drum - Income Plus Reit

73.6

Drum - Drum Plc

44.3

Tirupati Graphite PLC

43.9

Tiger Royalties And Investments PLC

42.9

Hammerson PLC

40.8

Seneca Growth Capital VCT PLC

39.6

New City Investment Managers - Geiger Counter

38.3

Miton UK MicroCap Trust PLC

37.1

Source: FE Total return 31/12/2020 to 31/03/2021

Laith Khalaf
Financial Analyst

Laith Khalaf started his career in 2001, after studying philosophy at Cambridge University. He’s worked in a variety of roles across pensions and investments, covering both the DIY and the advised sides of the business. In 2007, he began to focus on research and analysis, and has since become a leading industry commentator, as well as a regular contributor to the financial pages of the national press. He’s a frequent guest on TV and radio, and for several years provided daily business bulletins on LBC.

Contact details

Mobile: 07936 963 267
Email: laith.khalaf@ajbell.co.uk

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