Willis Owen shares the best and worst-performing sectors and funds in February 2019

Posted by Adrian Lowcock in Press releases category on 01 Mar 19


  • US Smaller Companies continue to lead rally for second month in a row having been worst performer in December
  • Brazilian and Latin American funds drop into worst-performing funds having been best performers in January
Adrian Lowcock, Head of Personal Investing, Willis Owen says:

“US Smaller Companies continue to lead the recovery for the second month running as the US government re-opened and signs emerged of positive progress between the US and China, resulting in the former ditching tariff rises until further notice. China performed well in February in anticipation of a decision by the MSCI to raise the weighting of Chinese A shares in its emerging markets indices. This was tempered by some disappointing factory data that showed the sector had contracted for the third month in a row. Technology continues to be a significant driver of markets and is well-represented in the best-performing funds of February with Baillie Gifford Global Discovery, Baillie Gifford American and AXA Framlington Global Technology featuring.  However, top spot goes to TM Cavendish AIM, which is a reminder that while the AiM market in general has been disappointing, there are plenty of excellent opportunities for stock pickers.   By the end of the month though, global growth concerns had returned.

10 best-performing sectors

Investment Association Sector Percentage Return
North American Smaller Companies  4.97
China/Greater China 3.44 
Technology & Telecommunications 3.17 
North America 2.58 
Global 2.24 
Europe Including UK 2.17 
Global Equity Income 1.74 
Europe Excluding UK 1.73  
UK Equity Income 1.67 
UK All Companies 1.51 
Source: FE Analytics, performance from 31st January 2019 to 28th February 2019 in pounds sterling on a total return basis

10 best-performing funds

Funds Percentage Return
 TM Cavendish AIM  12.34
 JPM US Small Cap Growth 9.03 
 Baillie Gifford Global Discovery 8.42 
 Brown Advisory US Smaller Companies 8.16 
 Baillie Gifford American 8.15 
 TM Cavendish Opportunities 7.14 
 JPM Greater China 6.85 
 Neptune Global Smaller Companies 6.83 
 LF Purisima PCG 6.82 
 AXA Framlington Global Technology 6.80 
Source: FE Analytics, performance from 31st January 2019 to 28th February 2019 in pounds sterling on a total return basis

Bonds and defensive assets were again the worst-performing sectors as investors continued to rotate into shares. Japanese shares featured in the worst-performing lists as the pound railed against the yen, wiping out most of the gains made in that market for UK investors.  Part of the rally was due to optimism over Brexit and partly due to the Yen’s defensive characteristics – its safe haven nature means that it tends to fall when investors become more willing to take risks. 

The list of worst-performing funds primarily included Brazilian and Latin American equities, which was a reversal of January, when they led the pack. This is probably a natural recalibration of investors’ optimism towards new Brazilian President Jair Bolsorano as political risk rose and investors began to digest the scale of the challenge ahead.  Despite this, it was absolute return strategies such as BMO Global Equity Market Neutral, City Financial Absolute Equity and VT Oyexe Hedged Income which led the worst-performers. Targeted absolute return funds have come in for some criticism over recent years as they failed to deliver on promises in rising markets and have struggled to protect investors in falling markets.  

10 worst-performing sectors

Investment Association Sector Percentage Return
 Property Other -1.17 
 UK Index Linked Gilts -1.11 
 UK Gilts -0.80 
 Global Emerging Markets Bond -0.68 
 Japanese Smaller Companies Global Bonds -0.63 
 Global Bonds -0.56 
 Japan -0.47 
 Specialist 0.01 
 Global Emerging Markets 0.03 
 Targeted Absolute Return 0.05 
Source: FE Analytics, performance from 31st January 2019 to 28th February 2019 in pounds sterling on a total return basis

10 worst-performing funds

Funds Percentage Return
 BMO Global Equity Market Neutral V10  -10.12
 City Financial Absolute Equity -6.23 
 VT Oxeye Hedged Income Option -6.17 
 GAM Star Discretionary FX -6.03 
 HSBC GIF Brazil Equity -5.60 
 Baring Russia -5.44 
 Barings Latin America -5.37 
 Fidelity Latin America -5.03 
 M&G Japan -5.00 
 HSBC GIF Latin American Equity -4.98 
Source: FE Analytics, performance from 31st January 2019 to 28th February 2019 in pounds sterling on a total return basis

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Adrian Lowcock
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adrian.lowcock@willisowen.co.uk

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