Baillie Gifford rebounded to the top of the performance charts in June buoyed by a bumper month for tech and growth stocks.
Three out of the five best performing funds in June were from the Edinburgh manager, according to data from FE Fundinfo.
Its £7.6bn American fund, run by Tom Slater (pictured) and Gary Robinson claimed the top spot last month, returning 16.7%, while Health Innovation and Long Term Global Growth recorded gains of 15.7% and 13.4% respectively, putting them in third and fifth place. In May all three funds had been among some of the biggest losers, falling between 7-9%.
June was a strong month for high growth strategies, according to Ben Yearsley, director of Fairview Investing. “You can always tell if it’s a risk on month by the number of Baillie Gifford funds at the top of the tables,” he said.
On the investment trust side, British & American IT came out on top, returning 32.26%, followed by Chrysalis Investments, which rose 20%. Baillie Gifford’s US Growth trust also made the top five.
Inflation and the knock on impact on rate rises remains the main worries for markets, Yearsley said, though this did not stop US markets from hitting all-time highs last month.
“The economic recovery continues at pace with confidence high, maybe on the back of record UK house prices. It will be interesting to see how yesterday’s end to the stamp duty cut impacts on prices and ultimately consumer confidence.”
Don’t discount the value trade yet
The strongest Investment Association sector last month was Tech and Telco, which generated an average return of 8.2%, while second best was the Japanese Smaller Companies sector with returns of 5.1%.
On the opposite end of the spectrum gold funds continued to come under pressure following a sharp fall in prices last month. Baker Steel Gold & Precious Metals and Jupiter Gold & Silver were among some of June’s biggest laggards, sitting on losses of 13.6% and 12.5% respectively.
“The value trade may have petered out recently but there has been more nuance to markets in 2021 as evidenced by proper value sector energy topping the tables,” Yearsley said.
“It is easy to get into a mindset that only one style will win and forget there are many interesting companies around throwing off lots of cash. Again, this was seen in June with Baillie Gifford’s high growth style back to the fore. It’s all about balance in portfolios in my view – growth for long term, but don’t forget value can make you money too.”
UK small cap funds outshine US equity funds in H1
Energy funds have dominated for the first half of the year, as the price of oil shot up 50% this year. Schroders ISF Global takes the top spot, with returns up 37.8%, and close behind is GS North America Energy & Energy infrastructure, gaining 35.9%.
But the top performing fund sector for H1 2021 was UK Small Companies, which posted average gains of 20%. Aberforth UK Smaller Companies, Liontrust UK Microcap and Castlefield Best Sustainable UK Smaller Companies were among the top 10 funds in the first six months of the year, with Aberforth generating the highest returns at 32%.
The same was true in the closed-ended arena with the IT UK Smaller Companies sector returning 23.2%, just above the second strongest sector Commodities and Natural Resources (22.5%).
Private equity trusts also fared well over the first half of the year, producing an average share price gain of 19.8%. Electra Private Equity was the best performing investment company by a long shot, returning an outstanding 121% so far this year.
