50 days of lockdown: which investment funds have outperformed?

Hannah Smith on the best and worst performing funds, and the largest dividend cuts during lockdown.

As the UK marks 50 days of lockdown, investors have seen both positive and negative signs in the markets. Global stock markets have returned to positive territory after a disastrous early March, and most funds have made a positive return. However, billions of pounds worth of dividend cuts are weighing heavy on income-seeking investors.

Investment platform AJ Bell crunched the numbers to find out which funds have performed best since 23 March, as the UK steels itself for more weeks of restrictions. 

Gold and tech shine

Gold and technology funds have been the standout performers, while property funds dominated the worst performers list.    

- Large price swings aside, gold will continue to shine

ES Gold and Precious Metals is the lockdown winner, up 55.7%, followed by Ninety One Global Gold and BlackRock Gold & General, as investors sought shelter from market storms in this safe-haven asset, pushing up prices.

Tech and US funds that performed well included Baillie Gifford American, Morgan Stanley US Growth, and MFM Techinvest Special Situations.

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“This crisis has seen how technology has become integral to our everyday lives,” says AJ Bell personal finance analyst Laura Suter. “Whether it’s through various video conferencing services allowing us to work and socialise, Netflix entertaining us with binge-worthy TV or Amazon delivering goods and stopping us having to go to the shops, these technology companies have prospered as they have become essential services for many.

“US-focused funds have also been among the top risers, fuelled in part by this technology boom but also by the sharp rebound in American markets after falls in February and early March,” she adds.

Property on shaky ground

The list of worst-performing funds during the last 50 days is largely made up of property funds as the sector has ground to a halt. With no sales taking place, it is impossible to price assets accurately, and many funds are still suspended, meaning trapped investors are seeing fund managers write down the value of assets, says Suter.

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The worst lockdown performer was LF Equity Income, formerly the Woodford UK Equity Income fund, which lost investors 16.7% while still suspended. “The illiquid and unlisted assets in the fund will likely have been hit by the wider market downturns, but this fall in value really reflects the fact that investors received some of their money back on 25 March after assets were sold off so isn’t a true reflection of performance,” Suter explains.

The comeback kids

All major markets have risen during the lockdown, following falls of as much as 30% between February and March and investors panic-sold equities. The market showing the most significant rebound was the FTSE AIM All Share, up 37%, while the FTSE 250 rose 25% and the FTSE 100 19%.

Just six companies in the FTSE 100 saw their share prices fall during the last 50 days. The S&P 500, meanwhile, recorded an impressive 31% rise, while Asian markets also saw an uplift.

Dividends on the chopping block

However, there was some pain for investors as 289 dividends were either axed or deferred during lockdown, losing them £28.3 billion worth of payouts. In the FTSE 100, 41 companies took the axe to their dividends, including banks, miners and oil majors.

Nine in 10 UK shares have cancelled or suspended dividend payments

“The banking giants make up the largest cuts, with over £5 billion of dividends cut at HSBC, £1.6 billion at Lloyds and just over £1 billion at Barclays. Royal Dutch Shell’s near £2 billion dividend cut is among the largest and was one of the biggest shocks for investors’ portfolios,” says Suter.

Four of the UK’s 10 biggest dividend payers have cut or frozen payments: will the rest follow suit?

Largest dividend cuts during lockdown

Date announced Company Value of dividend cut (£M)
31-Mar-20 HSBC £3,457
07-May-20 BT £3,348
31-Mar-20 Glencore £2,126
30-Apr-20 Royal Dutch Shell £1,979
28-Apr-20 HSBC (2) £1,627
31-Mar-20 Lloyds £1,576
31-Mar-20 Barclays £1,039
31-Mar-20 Royal Bank of Scotland £968
08-Apr-20 Aviva £839
TOTAL   £16,959

 

Best performing funds

Fund Performance (%)
ES - Gold and Precious Metals 55.71
Ninety One - Global Gold 54.13
BlackRock - Gold & General 53.81
MFM - Junior Gold 52.84
Quilter Investors - Precious Metals Equity 50.71
Baillie Gifford - American 49.08
Morgan Stanley - US Growth 48.75
Smith & Williamson - Global Gold & Resources 47.79
New Capital - US Future Leaders 46.69
DMS - Charteris Gold & Precious Metals 46.45
Schroder - ISF Global Energy 45.91
Goldman Sachs - North America Energy & Energy Infrastructure Equity Portfolio 45.54
LF Canada Life - Global Resource 44.9
MFM - Techinvest Special Situations 44.15
BlackRock - GF World Energy 43.78
BlackRock - GF World Mining 42.76
Mirabaud - UK Equity High Alpha 42.37
LF Miton - UK Smaller Companies 41.05
Morgan Stanley - US Advantage 40.03
MFM - Junior Oils Trust 39.2

Source: FE/AJ Bell

Worst performing funds

Fund Performance (%)
LF - Equity Income -16.73
ASI - Strategic Investment Allocation -15.66
First Arrow - Diversified -13.76
VT - Moray Place Investment Company -11.62
Aviva Investors - European Property -7.03
Canada Life - UK Property Jersey -6.8
Janus Henderson - Multi Asset Credit -6.6
Winton Trend -5.82
LF Canada Life - UK Property ACS -5.56
iShares - Overseas Government Bond Index -5.34
Kames - Property Income -5.09
Aviva Investors - UK Property -4.95
Janus Henderson Inst - Overseas Bond -4.4
Pictet TR - Atlas -4.37
Capital Group - Euro Bond (LUX) -4.26
Threadneedle - UK Property Authorised Investment -4.2
Threadneedle - Global Bond -4.2
Standard Life Investments - UK Real Estate -4.18
Scottish Widows - International Bond -4.13
Threadneedle European Bond -3.96

Source: FE/AJ Bell

 

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