UK funds remain out of favour among investors based on recently published fund performance figures.
These are the findings of UK investment platform Willis Owen which presented its best and worst performing funds, sectors and markets over the last 12 months based on data provided by FE Analytics.
And while technology-focused funds and UK fund manager Baillie Gifford feature prominently among the top performers over the last 12 months, the worst performing sectors are dominated by the UK.
In a year dominated by the coronavirus, the tech and telecoms investment sector produced 37.98% returns, almost 10% ahead of China-focused funds at 28.62%.
Baillie Gifford’s long-term investment strategy also had great success claiming five of the top ten best performing funds, including the top performer Baillie Gifford American which produced 113.05% returns, helped in part by its inclusion of US tech firm Tesla and its stellar rise in share price. Its other funds were a combination of global exposure and ESG, via its Positive Change fund.
However, the UK market suffered poorly. “The UK market simply had the worst mix of companies for investing in a lockdown, impacting the cyclical oil majors, airlines, mining stocks and hospitality businesses in particular,” said Adrian Lowcock, head of personal investing at Willis Owen.
“Because of the speed of the crisis and the extent of the response companies were quick to cut their dividends to protect their businesses. The UK’s traditional bias towards paying an income therefore added to the woes of the sector,” added Lowcock.
Unresolved issues over Brexit have also diminished the attractiveness of UK companies among investors, said Lowcock. “International investors have continued to avoid the region, waiting for more clarity before deciding to invest – especially given there are less risky options available.”
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