Tech and commodity funds bounced back in April, after floundering during the first quarter, which also saw European and UK smaller companies strategies surge ahead.
Last month’s strongest performers were dominated by tech-heavy and precious metal funds, which accounted for nine out of 10 of the top funds.
Two belonged to growth house Baillie Gifford. The £80m Baillie Gifford Health Innovation fund, which is just over three months old, returned 13.5%, making it the second strongest performer in April. Further down the list was the £6.7bn Baillie Gifford American fund, which was up 10.4% last month. Both funds were among last month’s biggest losers.
See also: Baillie Gifford funds fumble as UK equities bounce back
Another tech fund to benefit from the more positive economic outlook was the £99m Liontrust Global Technology fund, managed by Robin Geffen, which returned 10.7%.
Ruffer Gold and Blackrock World Mining rebound
Last month brought a stunning reversal of fortunes for commodities funds, which had been among the worst performing funds in Q1, as gold and oil prices rose with inflation expectations.
Fairview Investing consultant Ben Yearsley notes gold gained $60 during April, closing at $1767, while oil closed up almost $3, finishing the month at $66.76. Copper also had a standout month, rising by almost 10%, yet another indication inflation is on the horizon, said Yearsley.
The cream of the crop of the commodities funds was the £681m Ruffer Gold fund, which gained 11.5% in April, clawing back losses from Q1 where it was the fifth worst performer of the entire IA universe.
The Jupiter Gold & Silver and the Blackrock World Mining funds also featured among April’s winners, returning 11.2% and 9.8% respectively.
UK and European Smaller companies have a strong run
While tech and commodities had a strong run last month European Smaller Companies and UK Smaller Companies were the top performing IA sectors, returning 6.96% and 6.93% respectively.
Yearsley said this comes as no surprise as economic forecasts are being revised upwards in the UK with the EY Item Club upgrading their forecast to 6.8% growth in 2021 from 5%.
He said the UK smaller companies sector should be “prime beneficiaries of one of the best growth outlooks in decades” and that the sector can deliver “real growth” in the long term.
India and Japan funds slump after devastating Covid hit
At the other end of the scale, a number of Indian funds languished at the bottom as the country continues to grapple with the Covid crisis.
The Aberdeen Standard Indian Equity fund was April’s worst performer, and one of four Indian funds in the bottom ten, returning -4.5%. The $1.2bn (£862m) fund has returned 14.9% over three years, below the IA Specialist average of 19.5% according to Trustnet.
In terms of sectors Japanese Smaller Companies had the poorest show in April, losing 2.1%, followed by Japan, which fell 1.8%.
St James’s Place’s Japan fund was among the worst hit, falling 3.7%, making it the fifth worst performer. The three-year-old fund managed by Yoshihiko Ito has underperformed for some time, losing investors 17.5% over three years.
The Oyster Japan Opportunities, the Standard Life Japan and the Nomura Japan High Conviction also featured in the bottom ten.
