Which funds were the winners in the vaccine bounce?

Sam Slator 08/11/2021 in Global, Investment Trusts

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.

Pfizer’s game changer

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%.

And, as Giles Rothbarth, manager of BlackRock European Dynamic, predicted at the time in his podcast interview, more vaccine announcements followed in quick succession.

But a year on, did the value rally last or did growth strategies prevail?

Value beats growth over one year

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 Situationsfunds 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.”

Top 20 Elite Rated funds and trusts since the vaccine bounce**

RankFund or TrustPercentage returns**
1Fidelity Special Values PLC 65.83
2Liontrust UK Micro Cap 61.11
3JOHCM UK Equity Income 55.40
4Marlborough European Multi-Cap 54.75
5TM CRUX UK Special Situations 54.62
6Schroder Recovery 52.60
7Marlborough UK Micro Cap Growth52.50
8Ninety One UK Special Situations52.41
9Schroder Income 52.35
10Goldman Sachs India Equity Portfolio52.00
11Ninety One Global Special Situations51.44
12Lowland Investment Company50.34
13GAM UK Equity Income 49.86
14MI Chelverton UK Equity Growth 49.46
15Schroder Global Recovery48.78
16SVM UK Opportunities 47.89
17ES R&M UK Recovery 47.23
18LF Gresham House UK Micro Cap45.87
19Stewart Investors Indian Subcontinent Sustainability44.47
20Slater Growth44.09

*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

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.