Willis Owen reveals the best and worst sectors and funds in 2020
- Technology stocks drive markets in 2020
- Baillie Gifford take 5 of top 10 performing funds
- UK leads the worst-performing sector
This year has been one of the most volatile on record thanks to the global pandemic which has dominated our lives, and our investments, since it first appeared at the start of the year.
The way we live, the way we work, and the way we consume have all shifted dramatically, with the reaction in markets bouncing from panic to euphoria on a regular basis as news of the virus and of vaccines dominated investment flows.
Amid the chaos, some clear winners have emerged, says Adrian Lowcock, Head of Personal Investing at Willis Owen.
“This year has seen technology’s dominance of markets increase significantly as lockdowns, the global response to coronavirus, benefited them first and foremost, whilst having a significant impact on cyclical and value stocks.
As a result, and perhaps unsurprisingly, the technology sector was nearly 10% ahead of any other. Technology stocks really benefitted in the rebound rally from April until the summer, before giving up some of those gains as investors grew concerned over valuations.
However, further lockdowns in Europe and a return of the virus meant the trends of working from home and online shopping continued to grow.
China came in second in terms of overall performance, with some strong returns for investors. The Chinese economy recovered well from their lockdown at the start of the year. They contained the virus quickly and have managed the situation effectively since and, as a result, the confidence in the manufacturing sector reached a 10-year high recently.
The tech bias was also reflected in the top-performing funds, which were led by Baillie Gifford American which benefited from the stellar rise in Tesla’s share price in particular.
The Baillie Gifford style of long-term investment in companies offering superior returns has rewarded investors this year, as five of the top 10 performing funds come from this one group. The remainder of the top 10 have a technology and US bias as the volatility caused by the pandemic separated the winners and losers.
10 best-performing sectors
|
Investment Association Sector |
Percentage |
|
Technology & Telecommunications |
37.98 |
|
China/Greater China |
28.62 |
|
Asia Pacific Including Japan |
22.37 |
|
North American Smaller Companies |
18.36 |
|
Asia Pacific Excluding Japan |
15.11 |
|
North America |
14.85 |
|
Global |
12.76 |
|
European Smaller Companies |
12.28 |
|
Japan |
12.05 |
|
Japanese Smaller Companies |
11.91 |
Source: FE Analytics, performance from 31st December 2019 to 30th November 2020 in pounds sterling on a total return basis
10 best-performing funds
|
Funds |
Percentage |
|
Baillie Gifford American |
113.05 |
|
Morgan Stanley US Growth |
110.45 |
|
LF Access Long Term Global Growth Investment |
92.45 |
|
Baillie Gifford Long Term Global Growth Investment |
89.71 |
|
Baillie Gifford Positive Change |
74.92 |
|
Baillie Gifford Global Discovery |
67.18 |
|
Morgan Stanley US Advantage |
67.02 |
|
Lord Abbett Innovation Growth |
63.24 |
|
Baillie Gifford Global Stewardship |
63.11 |
|
T. Rowe Price Global Technology Equity |
62.87 |
Source: FE Analytics, performance from 31st December 2019 to 30th November 2020 in pounds sterling on a total return basis
“On the downside, the worst-performing sectors have been dominated by the UK. 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.
“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.
“Finally, the issue of Brexit was never too far away from investors’ minds and has weighed on the UK stock market for over four years now. International investors have continued to avoid the region, waiting for more clarity before deciding to invest – especially given there are less risky options available.
The energy sector was arguably the hardest hit as the oil price crashed due to an ill-timed (although short-lived) price war just as consumption plummeted. With economic activity disrupted for most of 2020, the oil price has yet to make a full recovery and demand remains low.
LF Equity Income leads the worst performers of 2020, although much of this is due to Woodford’s former fund slowly being wound up. Nonetheless, it needs to serve as a reminder for investors that it is important to invest in several funds, not just one or two. Guinness Global Energy leads the rest of the pack for obvious reasons, whilst Jupiter UK Growth and GVQ UK Focus round off the bottom ten.
10 worst-performing sectors
|
Investment Association Sector |
Percentage |
|
UK Equity Income |
-13.79 |
|
UK Equity & Bond Income |
-10.04 |
|
UK All Companies |
-9.97 |
|
Property Other |
-7.87 |
|
UK Direct Property |
-3.61 |
|
UK Smaller Companies |
-0.9 |
|
Global EM Bonds – Local Currency |
-0.88 |
|
Targeted Absolute Return |
1.46 |
|
Mixed Investment 20-60% Shares |
1.58 |
|
Global Equity Income |
1.91 |
Source: FE Analytics, performance from 31st December 2019 to 30th November 2020 in pounds sterling on a total return basis
10 worst-performing funds
|
Funds |
Percentage |
|
LF Equity Income |
-62.98 |
|
Guinness Global Energy |
-38.58 |
|
HSBC GIF Brazil Equity |
-35.69 |
|
TB Guinness Global Energy |
-34.65 |
|
Schroder ISF Global Energy |
-34.41 |
|
Brown Advisory Latin American |
-33.72 |
|
Quilter Investors Equity 2 |
-30.8 |
|
BlackRock GF World Energy |
-28.3 |
|
Jupiter UK Growth |
-28.12 |
|
GVQ UK Focus |
-27.74 |
Source: FE Analytics, performance from 31st December 2019 to 30th November 2020 in pounds sterling on a total return basis
-Ends-
Enquiries
Adrian Lowcock, Chris Tuite
Head of personal investing Director & Head of Consumer Finance
Willis Owen MRM London
07849 846387 020 3326 9925
Adrian.lowcock@willisowen.co.uk 07471350180
Notes to Editors
Willis Owen is one of the UK’s leading online investment service providers. Founded more than 20 years ago Willis Owen now has around £1bn of funds under management and has acted as an intermediary for over 150,000 customers and hundreds of millions of pounds worth of investments,
Willis Owen Limited is authorised and regulated by the Financial Conduct Authority.