One year on from COVID crash, which funds fared best?

On 20th February 2020, the fastest bear market in history began and, in just 20 days the global stock market fell by 20%. It bottomed on 23rd March having fallen a total of 25.66%*.

Three months after the first case was identified, more than a month after the BBC first mentioned a ‘mysterious virus in China’, and three weeks before it was officially deemed a pandemic, the world had finally woken up to the seriousness of the Coronavirus.

One year on, we take a look at which Elite Rated funds protected investor cash best during the crash, which funds bounced back best in the recovery, and which funds fared best over the year’s cycle.

Top ten defensive funds

The best performing Elite Rated funds during the bear market crash were predominantly a mix of bond and absolute return funds – successfully proving their vital roles in a portfolio of diversification and capital preservation. While they may be ‘boring’ investments in normal times, they can come into their own during a crisis.

Two funds even stayed in positive territory: M&G Global Macro Bond, up 9.2%* and Allianz Strategic Bond, up 7.87%*. Manager of the Allianz fund, Mike Riddell, told us how he achieved this in an Investing on the Go podcast.

The one equity fund in the mix was JP Morgan China Growth & Income. First into the crisis, China’s stock market held up considerably better than many of its global peers during the downturn.

RankElite fund or trustPercentage returns during bear market crash*
1M&G Global Macro Bond9.20%
2Allianz Strategic Bond7.87%
3BlackRock European Absolute Alpha-3.22%
4Janus Henderson UK Absolute Return-3.37%
5AXA Sterling Credit Short Duration Bond-3.44%
6TwentyFour Absolute Return Credit-3.89%
7JP Morgan China Growth & Income-6.39%
8SVS Church House Tenax Absolute Return Strategies-6.59%
9Jupiter Strategic Bond-6.68%
10TwentyFour Corporate Bond-6.74%

Top ten recovery funds

After the short, sharp shock, equity markets rebounded strongly, despite economic shutdowns around the world and ongoing uncertainty. The strongest Elite Rated offering in the recovery has been Scottish Mortgage Investment Trust. Four other products managed by the growth-orientated Baillie Gifford also made it into the top ten, along with two Chinese equity trusts. At number ten is the best performing UK equity fund in the recovery: Marlborough UK Micro Cap Growth.

RankElite fund or trustPercentage returns during market recovery**
1Scottish Mortgage Investment Trust197.54%
2Baillie Gifford American189.58%
3JP Morgan China Growth & Income160.20%
4Fidelity China Special Situations156.72%
5Premier Miton US Smaller Companies151.56%
6Baillie Gifford Global Discovery146.55%
7Baillie Gifford Japan Trust104.97%
8JP Morgan Emerging Markets Investment Trust104.04%
9Baillie Gifford Shin Nippon101.29%
10Marlborough UK Micro Cap Growth98.88%

Top ten funds over a year of COVID

Having been the only Elite Rated offering to make it into the best defensive and recovery tables, it’s perhaps no surprise that JP Morgan China Growth & Income is the number one performer over the whole year***. It is joined in the top ten by seven offerings that were amongst the best in the recovery.

Demonstrating resilience and consistency are also Sanlam Artificial Intelligence and Aubrey Global Emerging Markets Opportunities.

RankElite fund or trustPercentage returns over one year***
1JP Morgan China Growth & Income143.58%
2Scottish Mortgage Investment Trust115.14%
3Baillie Gifford American112.51%
4Fidelity China Special Situations103.28%
5Baillie Gifford Global Discovery83.41%
6Premier Miton US Smaller Companies70.55%
7Baillie Gifford Shin Nippon56.80%
8Aubrey Global Emerging Markets Opportunities52.90%
9Sanlam Artificial Intelligence48.48%
10Baillie Gifford Japan Trust47.18%

*Source: FE fundinfo, total returns in sterling, 20 February 2020 to 23 March 2020
** Source: FE fundinfo, total returns in sterling, 23 March 2020 to 14 February 2021
*** Source: FE fundinfo, total returns in sterling, 20 February 2020 to 14 February 2021

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.