Best performing Elite Rated funds of 2018…. and the 21st century

As an avid football fan I’m used to the highs and lows of any season. As an investor I’m also used to the highs and lows of stock markets, but 2018 has been a bit of a roller-coaster ride, even for me.

After a couple of years of gently rising markets, volatility returned with a vengeance this year. The FTSE 100 started January at a level of 7,648 only to fall to just under 7,000 in March. It then rose to an all-time high in May (7,887) before taking a turn for the worst. At the time of writing it is at 6,721*.

21st century gains… all gone

Cue headlines about “the UK stock market losing all of its 21st century gains”. Yes, the FTSE 100 did start the 21st century just under 7,000. Yes, it is lower today.

However, there are two important points that the editors are missing. The first is that, if you reinvested dividends, an investor in the FTSE 100 today is still sitting on gains of about 90%**. The second is that there are a number of actively managed UK equity funds that have done a lot better.

Not all our rated funds existed 19 years ago, but those that did have all done better than the index of the UK’s largest 100 companies. The table below shows the three best performing trusts and funds.

We’ve deliberately left mid-cap and smaller companies funds out of the tables, as we are comparing performance with that of the FTSE 100. If we had included them, you would see that Marlborough Special Situations fund has returned an incredible 1001.73%** over the period!

Top three Elite Rated UK equity trusts and funds since 31 December 1999**

PositionName of trustPercentage returns**
1Fidelity Special Values plc781.35%
2Lowland Investment Company507.61%
3City of London Investment Trust216.15%

 

PositionName of fundPercentage returns**
1Schroder Recovery496.68%
2Schroder Income347.66%
3Rathbone Income327.73%

Best performing funds in 2018

Back to 2018. While we’ve been ‘distracted’ by ongoing Brexit negotiations and uncertainty here in the UK, the big investment stories have been US equities and, in particular, the giant technology stocks. While both have fallen along with everything else in recent months, the sectors still hold the top spot in terms of 2018 performance.

This is reflected somewhat in the table of our top ten performing Elite Rated funds and trusts of 2018: while only two are out and out US equity funds and one a technology fund, five more are global funds with a large weighting either to US or technology companies.

The exceptions are Baillie Gifford Shin Nippon in fifth place (7.53%***), which invests in Japanese smaller companies and Stewart Investors Asia Pacific Sustainability fund (6.92%***), which invests in companies in Asia. Both have bucked the trend of their peers, with the Stewart Investors fund in particular, performing against the odds: the average Asia Pacific ex Japan fund has actually made losses in excess of 8%***.

 

Top ten Elite Rated funds and trusts in 2018***

PositionNamePercentage returns***
1Polar Capital Healthcare Opportunities19.98%
2Baillie Gifford Global Discovery15.53%
3AXA Framlington American Growth11.67%
4AXA Framlington Global Technology11.02%
5Baillie Gifford Shin Nippon7.53%
6Fundsmith Equity7.45%
7Stewart Investors Asia Pacific Sustainability6.92%
8T. Rowe Price Global Focused Growth Equity6.49%
9Scottish Mortgage Investment Trust6.25%
10Brown Advisory US Flexible Equity5.95%

 

*As at 10 December 2018
**Source: FE Analytics, total returns in sterling, 31 December 1999 to 10 December 2018
***Source: FE Analytics, total returns in sterling, 29 December 2017 to 10 December 2018

The views of the author and any people interviewed are their own and do not constitute financial advice. 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. Before you make any investment decision make sure you’re comfortable and fully understand the risks. If you invest in fund or trust make sure you know what specific risks they’re exposed to. Past performance is not a reliable guide to future returns. Remember all investments can fall in value as well as rise, so you could make a loss.