Investors shrug off lockdown to send global markets soaring in April: Willis Owen reveals the best & worst sectors and funds in April 2020
- UK Direct Property the only asset class to deliver negative returns in April
- Gold funds dominate the top 10 performing funds in April
- US index records best month since 1987
Adrian Lowcock, Head of Personal Investing, Willis Owen says:
The global lockdown was not enough to deter stockmarkets in April which bounced back strongly as investors focused on the huge support packages being unveiled by central banks, with some markets seeing their biggest monthly gains for more than 30 years.
“Smaller companies led the rebound, having led markets lower during the March crash. Although the US has so far suffered the most from the Coronavirus and has rocketing unemployment, investors reacted positively to a series of stimulus packages coming from the US government.
“This helped the S&P 500 index in the US return 12.7% in April, its biggest one-month return since 1987, as the US’ leading positions in technology helped its markets to race higher.
“Technology firms have been huge beneficiaries of the lockdown as companies and people turn to digital services to carry on working and living their lives. As a result, technology companies held up well during the crash and continued to perform during April’s rebound.”
“However, whilst the ten best performing sectors were all equity based, the top ten best performing funds tell a different story. Gold has been the big winner from the move by central banks to expand balance sheets to support economies, companies and individuals, with the price up almost 4% in April alone, and precious metals funds have benefitted directly.
“As a result, 8 out of the top 10 funds in April were precious metals or gold portfolios. The demand for gold suggests investors are treating the rebound with some caution and are investing in the precious metal to provide some insurance for their portfolios. The Ninety One Global Gold fund is the best performing precious metals fund for April. As the name suggests it invests mainly in gold mining companies but can invest up to a third into companies involved in mining other precious metals.
“Given the collapse in the oil price, particularly in US futures, it is hard to believe that energy funds would show a positive figure, let alone appear in the top 10 performers for April. However, Schroder ISF Global Energy fund tops the performance charts delivering an impressive 44% return. Part of the reason for this is energy funds were the worst-performing in March as the sector was reeling from oversupply caused by the Saudi/Russian oil price war and slump in demand due to coronavirus crisis. April saw energy companies rebound from March lows on hopes both headwinds would be temporary, and as investors dismissed the oil price collapse in April as a short-term, technically-driven issue.”
10 best-performing sectors
|
Investment Association Sector |
Percentage |
|
North American Smaller Companies |
16.77 |
|
UK Smaller Companies |
14.19 |
|
Technology & Telecommunications |
12.89 |
|
North America |
12.54 |
|
European Smaller Companies |
11.29 |
|
UK All Companies |
10.49 |
|
Global |
10.3 |
|
Asia Pacific Excluding Japan |
9.28 |
|
Asia Pacific Including Japan |
9.22 |
|
Japanese Smaller Companies |
9.2 |
Source: FE Analytics, performance from 31st March 2020 to 30th April in pounds sterling on a total return basis
10 best-performing funds
|
Funds |
Percentage |
|
Schroder ISF Global Energy |
44.3 |
|
Ninety One Global Gold |
40.21 |
|
BlackRock Gold & General |
40.14 |
|
Smith & Williamson Global Gold & Resources |
40.05 |
|
ES Gold and Precious Metals |
39.63 |
|
Quilter Investors Precious Metals Equity |
38.37 |
|
MFM Junior Gold |
37.44 |
|
DMS Charteris Gold & Precious Metals |
36.61 |
|
LF Ruffer Gold |
36.4 |
|
LF Canlife Global Resource |
36.03 |
Source: FE Analytics, performance from 31st March 2020 to 30th April in pounds sterling on a total return basis
“The laggard in April was the UK Direct Property sector, which remained in negative territory. Given that the bulk of the sector has struggled with being able to accurately value the underlying properties in the funds, leading to many being suspended, it is still going to be some time before we find out what the full extent of the impact the crisis will have had on property funds.
“The rest of the worst performing sectors consisted of Government Bonds which topped the performance tables in March. Whilst they were unable to maintain that strong performance, they continued to deliver a positive return as investors are still cautious of the impact lockdown will have on the global economy.
“The worst performing funds for the month were a mixture of absolute return funds, such as the VT Oxeye Hedged Income Option which lost a modest 6%, and property funds. The worst property fund for the month was the BMO UK Property and was one of four property funds in the bottom 10. However, this should be kept in perspective as the fund has still managed to make a positive return in 2020.”
10 worst-performing sectors
|
Investment Association Sector |
Percentage |
|
UK Direct Property |
-0.77 |
|
Global EM Bonds Hard Currency |
1.87 |
|
Global EM Bonds Blended |
2.21 |
|
Global Bonds |
2.24 |
|
UK Index Linked Gilts |
2.29 |
|
Targeted Absolute Return |
2.32 |
|
UK Gilts |
2.57 |
|
Global EM Bonds Local Currency |
3.47 |
|
Sterling Strategic Bond |
3.96 |
|
Mixed Investment 0-35% |
4.08 |
Source: FE Analytics, performance from 31st March 2020 to 30th April in pounds sterling on a total return basis
10 worst-performing funds
|
Funds |
Percentage |
|
VT Moray Place Investment Company |
-12.93 |
|
ASI Strategic Investment Allocation |
-8.67 |
|
The VT Oxeye Hedged Income Option |
-5.95 |
|
BMO UK Property |
-3.56 |
|
Aviva Inv European Property |
-2.93 |
|
Winton Trend |
-2.17 |
|
GAM Multibond ABS-CHF |
-2.15 |
|
Standard Life Investments UK Real Estate |
-2.04 |
|
Aviva Inv UK Property |
-2.02 |
|
Baring Emerging Markets Sovereign Debt |
-1.83 |
Source: FE Analytics, performance from 31st March 2020 to 30th April in pounds sterling on a total return basis
-Ends-
Enquiries
Adrian Lowcock, Chris Tuite
Head of personal investing Director
Willis Owen MRM London
07849 846387 020 3326 9925
Adrian.lowcock@willisowen.co.uk 07471350180
Notes to Editors
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