Backing this summer’s winner

Ryan Lightfoot-Aminoff 13/09/2018

Kew Gardens – the horse not the place – is the current favourite to win the St Leger Stakes this weekend. It is one of 14 runners taking part in the oldest of Britain’s five classic races and the last of the five that run each year.

While I neither follow horse racing, nor think the ‘Sell in May and come back on St Leger’s Day‘ adage is any better than basing investment decisions on the toss of a coin, it does give me a reason to look at the investment winners and losers between May and September.


Mixed results

It has been a mixed summer: looking at the different fund sectors, average returns vary from 17.8%* for North American Smaller Companies to a loss of 6.96%* for Global Emerging Markets.

President Trump’s America first vision has indeed succeeded – in investment return terms at least. Those taking on risk outside the developed markets have not been rewarded with better returns.

UK equities have remained relatively unmoved, despite ongoing Brexit worries. UK Smaller Companies funds fared the best, with an average return of 2.69%*. Meanwhile, the UK All Companies sector was down 0.70%* and UK Equity Income fell 1.35%*.


Top five sectors

Sector% return 1 May 2018 to 10 Sept 2018*
IA North American Smaller Companies17.80
IA North America14.00
IA Technology & Telecommunications13.05
IA Global6.31
IA Global Equity Income5.10


Bottom five sectors

Sector% return 1 May 2018 to 10 Sept 2018*
IA Global Emerging Markets-6.96
IA China/Greater China-6.95
IA Global Emerging Markets Bond-4.00
IA Asia Pacific ex Japan-3.20
IA Asia Pacific inc Japan-1.98

Fund winners and losers

Investors in the top five performing Elite Rated UK equity funds would have fared better than the averages suggest, had they held onto their investments.


Top five Elite Rated UK Equity funds

Fund% return 1 May 2018 to 10 Sept 2018*
Liontrust UK Smaller Companies10.23
LF Livingbridge UK Micro Cap9.23
TB Evenlode Income4.81
Marlborough UK Multi-Cap Growth4.69
Fidelity Special Values4.50


And investors choosing Elite Rated funds in the top performing sectors, would also have been rewarded.


Top five overall Elite Rated funds

*Source: FE Analytics, total returns in sterling, 1 May 2018 to 10 September 2018

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions.Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice.Whilst FundCalibre provides product information, guidance and fund research we cannot know which of these products or funds, if any, are suitable for your particular circumstances and must leave that judgement to you. Before you make any investment decision, make sure you’re comfortable and fully understand the risks. Further information can be found on Elite Rated funds by simply clicking on the name highlighted in the article.