Small firms emerge winner through Conservative government

As the Tories prepare to launch their election Manifesto, analysis of how UK funds have performed since the Conservative Government came to power in May 2010 shows:

• UK Smaller Companies delivered the highest return at 193%
• UK Equity Income fared the worst with a return of 108%, UK All Companies returned 109%
• 9 of the top 10 funds are UK smaller companies funds
• 65% of UK equity funds beat the FTSE All Share, which delivered 109% during that time, while 76% beat the FTSE 100
• The top fund would have turned £10,000 into £45,510 today
• Merian takes top spot for UK Smaller Companies and All Companies funds – with Merian UK Smaller Companies Focus (355%) and Merian UK Dynamic Equity (288%). MI Chelverton UK Equity Income is the top UK Equity Income fund, returning 205%.

Laura Suter, personal finance analyst at AJ Bell said, “It’s been more than nine years since the Conservatives came into power, when David Cameron won the general election on 6^th May 2010. During that time we’ve had two more general elections, a Brexit referendum and a Scottish independence referendum. But how has all that, and the Tory party’s reign, affected UK investors?

“Anyone putting money into funds focused on smaller companies will likely have fared better than those investing in funds focused on FTSE 100 firms. Of the top 10 performing funds since the Tories came to power, nine are UK Smaller Companies funds. What’s more, 28 of the top 50 funds are in the sector.

“UK Smaller Companies as a sector had the highest average return, at 193%, compared to 109% for the UK All Companies sector and 108% for UK Equity Income. However, if you’d picked the top-performing smaller companies fund, Merian UK Smaller Companies Focus, you’d have seen more than double the average returns – with the fund rising by 355% during the 9.5 years. If you’d put £10,000 into the fund the day Cameron took office you’d have £45,510 today.

“Those investing in the top UK All Companies fund, Merian UK Dynamic Equity, would have seen returns of 288%, while MI Chelverton UK Equity Income was the top UK Equity Income fund, returning 205%.

“The worst performing fund was M&G Recovery, which delivered 46% during that time, significantly underperforming its FTSE All Share benchmark of 109%. This means someone investing £10,000 when Cameron moved into Number 10 would have £14,570 today – more than £30,000 less than the top performer. M&G Recovery’s value style of investing has been out of favour more recently, but the fund has also seen its investments underperform. This has caused its assets to plummet from £8bn at the peak to closer to £2bn today.”