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Best and worst performing funds and investment trusts in 2018

by LLB Reporter
12th Dec 18 8:32 am

Woodford-run Quilter fund the worst performing UK fund this year, according to AJ Bell.

US focused funds dominate the top performers while 80% of active fund managers delivered a loss in 2018.

“It proved a tough year for active fund managers, with only 22% of active funds managers delivering a return above zero this year, while 36% of investment trusts delivered a positive return,” comments Laura Suter, personal finance analyst at investment platform AJ Bell.

Baillie Gifford American was the highest performer, investing in a large number of big tech stocks, such as Amazon, Netflix, Google parent Alphabet and Facebook. While these stocks have had a torrid time in the second half of the year, they boomed in the first half of the year and some are still up on the year (Amazon is up 38% since Jan 1, Netflix is up 34%). The S&P 500 index is down 2% this year, with the Baillie Gifford fund up 26.3%, showing the manager’s concentrated portfolio and superior stock picking has delivered this year.

“A number of other American managers comfortably outperformed this, including T Rowe Price’s US Large Cap Growth Equity and US Blue Chip Equity, at 17.3% and 16.5% respectively, as well as Artemis US Smaller Companies at 15.4%. These managers all have a style tilt towards ‘growth’ stocks, which have outperformed this year, meaning that when this style is out of favour they will likely underperform the market.

“Not all the figures can be taken at face value.Lindsell Train Investment Trust is the top-performing trust, up 42.4%, but this is a case where you need to look under the bonnet to see where the performance has come from. Renowned investor Nick Train has undoubtedly had a good year, with his Lindsell Train Global Equity fund also making the top performers this year, returning 15%. However, the Lindsell Train Investment Trust is now trading at a 45% premium to the net asset value, having started the year at around a 13% premium. The trust returned 44.8% in share price terms this year, while the net asset value has risen by a more modest 10%.

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