Winter 2020/21: the funds gaining and losing their Elite Ratings
Following FundCalibre’s Winter investment committee, two investment trusts have gained an Elite...
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.
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.
|Rank||Elite fund or trust||Percentage returns during bear market crash*|
|1||M&G Global Macro Bond||9.20%|
|2||Allianz Strategic Bond||7.87%|
|3||BlackRock European Absolute Alpha||-3.22%|
|4||Janus Henderson UK Absolute Return||-3.37%|
|5||AXA Sterling Credit Short Duration Bond||-3.44%|
|6||TwentyFour Absolute Return Credit||-3.89%|
|7||JP Morgan China Growth & Income||-6.39%|
|8||SVS Church House Tenax Absolute Return Strategies||-6.59%|
|9||Jupiter Strategic Bond||-6.68%|
|10||TwentyFour Corporate Bond||-6.74%|
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.
|Rank||Elite fund or trust||Percentage returns during market recovery**|
|1||Scottish Mortgage Investment Trust||197.54%|
|2||Baillie Gifford American||189.58%|
|3||JP Morgan China Growth & Income||160.20%|
|4||Fidelity China Special Situations||156.72%|
|5||Premier Miton US Smaller Companies||151.56%|
|6||Baillie Gifford Global Discovery||146.55%|
|7||Baillie Gifford Japan Trust||104.97%|
|8||JP Morgan Emerging Markets Investment Trust||104.04%|
|9||Baillie Gifford Shin Nippon||101.29%|
|10||Marlborough UK Micro Cap Growth||98.88%|
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.
|Rank||Elite fund or trust||Percentage returns over one year***|
|1||JP Morgan China Growth & Income||143.58%|
|2||Scottish Mortgage Investment Trust||115.14%|
|3||Baillie Gifford American||112.51%|
|4||Fidelity China Special Situations||103.28%|
|5||Baillie Gifford Global Discovery||83.41%|
|6||Premier Miton US Smaller Companies||70.55%|
|7||Baillie Gifford Shin Nippon||56.80%|
|8||Aubrey Global Emerging Markets Opportunities||52.90%|
|9||Sanlam Artificial Intelligence||48.48%|
|10||Baillie Gifford Japan Trust||47.18%|
*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