Four years since Brexit: European equities beat UK
In the four years since the UK voted to leave the European Union, European equities have outshone their UK counterparts, with returns three times that of British companies.
The average fund in the IA Europe ex UK sector has returned 42.79%* since the referendum, while the average fund in the IA UK All Companies sector has managed just 14.02%*.
Smaller companies on both sides of the channel have been more equally matched, although European firms still did better: the average IA European Smaller Companies fund returned 38.52%*, compared with 31.58%* for the average IA UK Smaller Companies fund.
Elite Rated funds top their peer groups
When it comes to individual funds, however, there is one particular standout: Elite Rated LF Miton European Opportunities, which has returned 117.53%* over the past four years – some 21%* more than its closest rival in the IA Europe ex UK sector, and almost three times more than the average fund.
The best performing Elite Rated UK equity fund over the period was MI Chelverton UK Equity Growth, which topped the IA UK All Companies sector returning 78.85%* – more than five times the sector average.
Commenting on the findings, Juliet Schooling Latter, research director of FundCalibre, said: “There has certainly been a mismatch in performance between the UK and Europe over the past four years since the referendum.
“Brexit, and the on-going uncertainty, has made the UK unattractive for investors. The concentration of oil and gas, basic materials and financials in our top 100 companies – all ‘value’ and out of favour areas – has not helped performance either. Even lower down in the mid 250, sector bias has not helped, particularly in recent months as travel, tourism and leisure companies are highly represented. In contrast, the weak pound against the euro has boosted overseas holdings. Thankfully, a number of well-managed funds have been able to buck the trend.
“I expect stock market volatility to continue in the next few weeks, as negotiations continue. But hopefully we will get a resolution, some clarity and a clearer path ahead, which would be beneficial to businesses and investors alike.”
Top ten performing Elite Rated European equity funds
| Rank | Fund name | Performance over four years* | Position in sector |
| 1 | LF Miton European Opportunities | 117.53% | 1/107 |
| 2 | Comgest Growth Europe ex UK | 81.55% | 3/107 |
| 3 | Jupiter European | 77.87% | 6/107 |
| 4 | BlackRock European Dynamic | 70.89% | 10/107 |
| 5 | Legg Mason IF Martin Currie European Unconstrained | 69.01% | 11/107 |
| 6 | Marlborough European Multi-Cap | 62.35% | 15/107 |
| 7 | Threadneedle European Select | 62.27% | 16/107 |
| 8 | T. Rowe Price European Smaller Companies Equity | 59.80% | 4/23 |
| 9 | Barings Europe Select | 52.03% | 6/23 |
| 10 | Montanaro European Income | 50.23% | 31/107 |
Top ten performing Elite Rated UK equity funds
| Rank | Fund name | Performance over four years* | Position in sector |
| 1 | MI Chelverton UK Equity Growth | 78.85% | 1/231 |
| 2 | Liontrust UK Micro Cap | 68.99% | 3/47 |
| 3 | TB Amati UK Smaller Companies | 64.64% | 4/47 |
| 4 | Liontrust UK Smaller Companies | 62.47% | 5/47 |
| 5 | LF Gresham House UK Micro Cap | 52.35% | 10/47 |
| 6 | LF Lindsell Train UK Equity | 51.83% | 8/231 |
| 7 | Marlborough UK Micro Cap Growth | 51.70% | 11/47 |
| 8 | TB Evenlode Income | 46.90% | 9/231 |
| 9 | Marlborough Multi-Cap Growth | 42.33% | 14/231 |
| 10 | Liontrust Special Situations | 40.22% | 15/231 |
*Source: FE Analytics, total returns in sterling, 23 June 2016 to 21 June 2020, using the IA UK All Companies, IA UK Smaller Companies, IA Europe ex UK and IA European Smaller Companies sectors.
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.
