High Stakes: Politics, Investing and Poker
“We’re basically watching a high stakes poker game.” These were the words of James Yardley,...
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*.
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!
|Position||Name of trust||Percentage returns**|
|1||Fidelity Special Values plc||781.35%|
|2||Lowland Investment Company||507.61%|
|3||City of London Investment Trust||216.15%|
|Position||Name of fund||Percentage returns**|
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%***.
|1||Polar Capital Healthcare Opportunities||19.98%|
|2||Baillie Gifford Global Discovery||15.53%|
|3||AXA Framlington American Growth||11.67%|
|4||AXA Framlington Global Technology||11.02%|
|5||Baillie Gifford Shin Nippon||7.53%|
|7||Stewart Investors Asia Pacific Sustainability||6.92%|
|8||T. Rowe Price Global Focused Growth Equity||6.49%|
|9||Scottish Mortgage Investment Trust||6.25%|
|10||Brown Advisory US Flexible Equity||5.95%|
*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