Best performing funds and trusts in January

Research from Quilter found that active equity fund managers outperformed their market indices in seven of the ten major sectors during 2020 – only those running equity income funds struggled to keep up, while the average US equity fund was in line with the index.

In a year of huge dividend cuts around the world, it’s perhaps not surprising that funds in the UK and global equity income sectors struggled. But overall it was a great year for active management. There were big chunks of every index that struggled and, instead of being stuck with COVID losers, active managers were able to change positioning quickly if they wanted to and make the most of valuation opportunities at the bottom of the market.

Interestingly, the best performing Elite Rated funds and trusts in 2020 were in a variety of equity markets. Some you would expect to have done well (the US and technology) but others – like Japan and emerging markets, were maybe more of a surprise for investors.

But which funds and trusts have had the strongest start to 2021?

Best performing Elite Rated funds and trusts in January

Four of the best performing funds and trusts so far this year are Chinese equity offerings. Another three invest in the wider Asia region.

The North Asian economies of China, Korea and Taiwan, which make up the bulk of the investible universe in Asia, have been more successful in containing the pandemic and their economies have reopened a lot earlier than developed markets.

This has given them a head start going in to 2021, as both the US, Europe and the UK are still fighting to contain second and third waves. The Asian consumer, sentiment and growth prospects are also stronger, while valuations are more reasonable. So it’s perhaps not a surprise their stock markets have started well.

Longer term the rising Asian consumer and middle classes will give the continent a structural boost and the new regional free trade agreement should gain legs. It all bodes well for this area of the world and some fund managers have suggested this could be Asia’s decade.

Top ten performing Elite Rated funds and trusts in January 2021

RankFund/Trust nameJanuary returns for funds*January returns for indices*
1Premier Miton US Smaller Companies9.72%1.14%
2Fidelity China Special Situations9.57%6.72%
3Invesco China Equity9.28%6.72%
4JPM China Growth & Income8.36%6.72%
5Baillie Gifford Global Discovery8.23%-0.90%
6Baillie Gifford American6.47%1.14%
7FSSA Greater China Growth5.79%6.72%
8JPM Asia Growth5.21%0.41%
9Invesco Asian5.17%0.41%
10Fidelity Asia Pacific Opportunities4.95%0.41%

 

*Source: FE fundinfo, total returns in sterling, 1 to 31 January 2021. Indices used for comparisons: FTSE China, FTSE North America Small Cap, FTSE Developed Asia Pacific ex Japan, FTSE All World and FTSE North America

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.