Barry Norris’ Argonaut Absolute Return fund has risen to the top of fund performance tables during a “horror show” month during which coronavirus volatility extended fund losses into the double digits.
Norris’ pint-sized £22.5m long/short equity fund topped the leader board in March, handing investors a 15% return, according to data from FE Fundinfo. This was significantly higher than the IA Targeted Absolute Return average which fell 4.9% during the month.
The next best fund VT Lambda Investment delivered 11.2%, while the Michael Lindsell run Lindsell Train Japan Equity fund returned 10.5%.
Rounding off the top five were the ASI Strategic Investment Allocation and the Aviva Investors Asia Pacific Property funds which returned close to 9%.
Norris shorts continue to deliver
Norris (pictured) is among a handful of long/short managers like Crispin Odey and Marshall Wace founders Paul Marshall and Ian Wace that have made a killing in the coronavirus sell-off.
Norris’ bet against NMC Health, singled out as one of his big winners in Argonaut Absolute Return’s February factsheet, continued to pay off as the London-listed firm saw another 86% wiped off its share price in March after it found $3bn of debt had been hidden from its board.
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Year-to-date Argonaut Absolute Return is up 22.6% compared with the IA Targeted Return at -6.0%.
During the coronavirus sell-off the Argonaut chief executive has slammed “beta jockey” long-only managers for whinging that the Financial Conduct Authority should implement a temporary ban on short-selling.
UK Gilts only sector to outperform in March
But Norris’ and Lindsell’s funds were the exception to the rule last month as the coronavirus continued to wreak havoc on markets.
The FTSE All-Share finished down 15% last month, while the S&P 500 and MSCI World both fell around 10% in sterling terms. For UK small caps the damage was even more severe with the FTSE Small Cap index down 20.7%
“From a fund perspective it was a horror show in March,” said Fairview Investing investment consultant Ben Yearsley, who added the impact from the coronavirus makes the great financial crisis seem “tame by comparison”. “The collapse in equity prices has brought in one of the quickest bear markets in history.”
The IA UK Gilts sector was the only asset class to achieve a positive return last month, up 1.6%. The UK Direct Property sector, the second-best performer, ended the period down 1.7%.
On a sector level, UK equities were the biggest laggards with the IA UK Smaller Companies sector down 22.6% and the UK All Companies and UK Equity Income sectors both down around 18.5%.
But oil focused funds continued to dominate the worst performers on an individual fund level as the price of Brent crude plunged to $23 per barrel at the end of March. For the second month in a row the Schroder ISF Global Energy was the worst fund, down 44.6%, followed by the MFM Junior Oils Trust (-37.8%).
