10 Years after Lehman’s

Posted by Adrian Lowcock in Press releases category on 12 Sep 18


  • 7 out of 10 worst performing funds invest in commodities
  • Technology sector has led the bull market
  • Japanese, US, UK and European Smaller Companies all performed strongly after the crisis
The top 10 best performing sectors

Funds Percentage Return
Technology & Telecommunications 337.22
Japanese Smaller Companies 310.79
North American Smaller Companies 294.95
UK Smaller Companies 244.72
North America 236.14
European Smaller Companies 222.13
China/Greater China 173.92
Asia Pacific Excluding Japan 165.1
Asia Pacific Including Japan 161.69
Global 144.9
Source: Willis Owen, FE Trustnet. 15th Sept 2008 to 11th Sept 2018 Total Return in sterling

and the 10 worst performing funds

Funds Percentage Return
Guinness Alternative Energy -50.77
MFM Junior Oils Trust -47.73
Aviva Inv European Property -33.83
Schroder ISF Global Energy -33.58
Marlborough ETF Commodity -28.03
HSBC GIF Brazil Equity -23.6
BlackRock GF World Mining -20.66
Pimco GIS Commodity Real Return -18
JPM Brazil Equity -15.72
Barings Global Resources Fund -15.37
Source: Willis Owen, FE Trustnet. 15th Sept 2008 to 11th Sept 2018 Total Return in sterling

Adrian Lowcock, head of personal investing, Willis Owen says:

“Markets have been more resilient to the effects of the financial crisis as companies responded quickly to events 10 years ago. The data has revealed some important trends which have occurred. One important point for investors to consider is that the best performers prior to the financial crisis have not fared so well afterwards. For example, the commodity super cycle prior to the financial crisis drove up the share prices of mining and energy companies, but the sector has suffered considerably over the last 10 years from falling prices and over investment.” 

“On the flip side of the coin, the tech sector has emerged as one of the success stories from the global financial crisis. Tech was hit badly by the dotcom bubble but since 2008 the sector has continued to rise from the ashes and lead markets higher in recent years.” 

“Perhaps the biggest surprise performer following the financial crisis has been the smaller companies sectors.  These should have suffered as the banking system froze up, but instead they have gone on to perform particularly well over the last decade.  The rise of innovative technology has enabled companies to reach larger audiences much more quickly.  Equally, it has helped companies find alternative ways to borrow money so they have not been forced to rely on traditional high street banks and lenders. Recent economic data suggests that small companies have learnt from their mistakes and become more responsible with their borrowing since the crisis, which has been another major contributor to the sectors success.” 

Fund picks and tips

“It is hard to accurately predict which sectors and funds will be the best performers over the next 10 years. However, based on current market trends, technology seems likely to retain its popularity with investors for years to come.”

“That said, history has taught us that the big trends which dominate markets today do not usually last forever, nor do they necessarily offer the best indication of future returns.” 

UK

The UK market remains important to investors, particularly because of the region has been discounted due to concerns over the impact of Brexit.

Man GLG Undervalued Assets – Managers Henry Dixon and Jack Barrett implement a disciplined process to stock selection. These managers conduct a thorough analysis of a companies balance sheet to understand its true value and liabilities. From this they identify two types of investible companies:  those trading below the company’s asset value and those where the company’s profits has not been fully appreciated relative to the cost of capital.

Global

For long term investing, it’s important to get a solid strategy that disregards transient fads and trends to delivering long term returns whilst protecting investors. 

Fundsmith Equity

Terry Smith’s core fund focuses on identifying good businesses with attractive valuations. The types of companies he invests in are growth compounders; i.e those who offer both reliable and consistent growth. Over the long term this will reward investors with decent returns whilst offering protection during volatile or weak markets.

Emerging Markets 

Emerging Markets have disappointed investors since the financial crisis and are currently out of favour having had a decent run in 2016 and 2017. However, the long-term outlook for the sector looks appealing as the local economies continue to grow and EM countries continue to benefit from a young and growing population.

Fidelity Emerging Markets

 Nick Price invests in companies with superior business models that demonstrate strong and sustainable profitability and a consistent track record over time. The manager looks for confirmation of quality through superior and sustainable return on assets, strong and unleveraged balance sheets, track record and valuation. Price prefers self-funding businesses which treat shareholders fairly. He is also interested in companies with long term growth potential where reinvestment in that growth delivers a high rate of return.  Holdings are sized based on these aspects and the portfolio manager’s view

Media enquiries

Willis Owen:

Adrian Lowcock
07849 846387

adrian.lowcock@willisowen.co.uk

PR Agency:

willisowen@mrm-london.com

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