Odey Absolute Return has slumped to the bottom of performance tables in January which also saw a slew of precious metal funds trailing behind.
Despite high hopes for 2021, funds had a disappointing start to the year as renewed lockdowns and the threat of new Covid strains dampened market performance.
“After the euphoria of ‘Vaccine November’ and ‘Brexit deal December’, January has turned into a damp squib,” said Fairview Investing consultant Ben Yearsley.
“Markets have just been a bit lacklustre rather than having a full on panic moment like last March. The only real excitement has been the day trading frenzy of the last week in the US, which will undoubtedly end in tears.”
Odey Absolute Return sees reversal of fortune
The biggest loser in January was Odey Absolute Return which fell by 12.5%. It was the only fund to rack up double digit losses over the period, with the next worst fund, Smith & Williamson Global Gold & Resources, sitting on losses of 8.6%.
Run by James Hansbury and Jamie Grimston, who are both partners at Crispin Odey’s boutique, the £478m fund’s losses were considerably higher than the IA Targeted Absolute Return sector average at -0.4%.
However on a one-year view it has outperformed the sector by a wide margin, delivering returns of 22.9% against the average fund’s 2.2%.
The recent fall comes on the back of a bad year for Odey Asset Management, which saw 30.5% wiped from its flagship Odey European fund in 2020. Despite this setback, eponymous fund manager Odey awarded himself £1.1m in dividends in 2020. Odey stepped down as co-chief executive in November amid accusations of indecent assault.
Ruffer and Blackrock gold funds circle the bottom
Gold and silver funds also had a bad start to the year, making up six out of 10 of the worst performing funds.
Alongside the £47m Smith & Williamson Global Gold & Resources fund, the £801m Ruffer Gold fund and Evy Hambro’s £1.3bn Blackrock Gold & General fund also lagged behind, losing 7.8% and 6.5% respectively.
Yearsley said the prevalence of gold funds circling the bottom was “odd”. “Normally in crisis times, it does well, but is Bitcoin taking the safety crown or are there concerns about real rates rising?”
Tyndall North American rides the Gamestop wave
January saw a big win for Tyndall North American, managed by Felix Wintle, which gained 14.4%. The fund beat the S&P 500 by 15% in a single month after betting on Gamestop as a three year turnaround story before seeing profits well ahead of schedule as armchair investors caused its shares to soar.
Elsewhere China, Asia and Emerging Markets focused funds performed strongly over the period, accounting for seven out of 10 of the top gainers.
Gam’s Multi Stock China Evolution was the best of the lot, returning 11.5%, while Invesco China Equity and Baillie Gifford China also offered up decent returns of 9.3% and 8.9% respectively.
See also: Gam funds top performance tables as China outperforms in difficult month for markets
Yearsley said Asian markets are primed for a “prolonged period of outperformance”. China was one of the few economies to grow in 2020 and is predicted to grow by over 8% this year. Other Asian economies have responded well to Covid and may see the benefits in their markets in the coming year.
“Better handling of Covid, lower debt levels, good demographics, and some world leading companies make for an exciting combination,” he said.
