Different ways to allocate to technology
This article first appeared on portfolio-adviser.com on 21st September 2022 It’s been a tough year...
On 9 November 2021, global stock markets rallied in what was termed the ‘vaccine bounce’.
Just seven months previously, the World Health Organisation predicted that a vaccine for COVID-19 could take 18 months to produce, and even that would require ‘Operation Warp Speed’ as the previous fastest vaccine – for mumps in 1967 – took four years to develop.
In June 2020 China gave its first vaccine to its military personnel. However, it was Pfizer’s announcement of Phase 3 trial results on 9 November 2020 that was the real game changer. And, with light finally at the end of the COVID tunnel, the UK stock market in particular reacted very positively to the possibility of the economy reopening.
The FTSE All Share rose almost 5% on the day* and investors around the world took part in a ‘dash for trash’, putting money into the likes of travel and leisure firms which have been hit hardest by the pandemic. The likes of Carnival and EasyJet saw their share prices rise more than 35%.
But a year on, did the value rally last or did growth strategies prevail?
Over the past 12 months the MSCI United Kingdom Value index has returned 31.5%** vs 23.2%** for the MSCI United Kingdom Growth index.
The MSCI World Value index has also triumphed, up 31.4%** vs 26.8%** for the MSCI The World Growth index.
“With the continued uncertainties and the second lockdown in January 2021, value strategies on average, have perhaps not done as well as first anticipated. And over three, five and ten years they still lag behind their growth peers by a considerable margin, commented Darius McDermott, managing director of FundCalibre.
“Some great stock-picking value funds and trusts have done spectacularly well over the past year, however,” continued Darius. “The likes of Fidelity Special Values, Schroder Recovery and Ninety One Global Special Situations – funds we highlighted at the time – have all returned between 51%-66%** over the past 12 months, demonstrating that it is important to have style diversification in a portfolio.
“The pandemic is not over by any means, and I am cautious about the economic outlook for 2022. But further medical advances – such as Merck’s anti-viral pill announced last week – mean that we are heading in the right direction.”
|Rank||Fund or Trust||Percentage returns**|
|1||Fidelity Special Values PLC||65.83|
|2||Liontrust UK Micro Cap||61.11|
|3||JOHCM UK Equity Income||55.40|
|4||Marlborough European Multi-Cap||54.75|
|5||TM CRUX UK Special Situations||54.62|
|7||Marlborough UK Micro Cap Growth||52.50|
|8||Ninety One UK Special Situations||52.41|
|10||Goldman Sachs India Equity Portfolio||52.00|
|11||Ninety One Global Special Situations||51.44|
|12||Lowland Investment Company||50.34|
|13||GAM UK Equity Income||49.86|
|14||MI Chelverton UK Equity Growth||49.46|
|15||Schroder Global Recovery||48.78|
|16||SVM UK Opportunities||47.89|
|17||ES R&M UK Recovery||47.23|
|18||LF Gresham House UK Micro Cap||45.87|
|19||Stewart Investors Indian Subcontinent Sustainability||44.47|
*Source: FE fundinfo, total returns in sterling, FTSE All Share, 6 to 9 November 2020
*Source: FE fundinfo, total returns in sterling, 6 November 2020 to 5 November 2021