Willis Owen reveals the best and worst sectors and funds in September 2020: Japanese equities shine in a lacklustre month
- Japanese equities benefit from a “Suga” boost
- Energy stocks suffer on fears of slower economic recovery
- Value stocks face headwinds of a second lockdown
Adrian Lowcock, Head of Personal Investing, Willis Owen says:
“The appointment of Yoshihide Suga as Prime Minister of Japan was welcomed by investors. It removed the risk that Abe’s work would be unwound and Japan would return to its old ways. However, most of the gains in Japanese funds were down to a weaker pound against the Yen as investors grew concerned over the possibility of negative interest rates, a second lockdown and Brexit fears returning to the headlines. These headwinds helped UK government bonds put in a positive performance this month.
Baillie Gifford Japanese Smaller Companies fund has high exposure to the domestic economy which hasn’t suffered as much from COVID-19. The fund has been able to identify the opportunities created by the crisis – e-commerce, software services and healthcare. Polar Capital Biotechnology is the best performing non-Japanese fund as a focus on treatments for COVID has generated interest in the specialist sector.
10 best-performing sectors
|
Investment Association Sector |
Percentage |
|
Japanese Smaller Companies |
9.88 |
|
Japan |
6.39 |
|
Asia Pacific Including Japan |
4.34 |
|
UK Index Linked Gilts |
3.58 |
|
UK Gilts |
2.53 |
|
Global Bonds |
1.98 |
|
European Smaller Companies |
1.74 |
|
Global EM Bonds Hard Currency |
1.17 |
|
Europe Including UK |
1.03 |
|
Asia Pacific Excluding Japan |
0.9 |
Source: FE Analytics, performance from 31st August to 30th September 2020 in pounds sterling on a total return basis
10 best-performing funds
|
Investment Association Sector |
Percentage |
|
Japanese Smaller Companies |
9.88 |
|
Japan |
6.39 |
|
Asia Pacific Including Japan |
4.34 |
|
UK Index Linked Gilts |
3.58 |
|
UK Gilts |
2.53 |
|
Global Bonds |
1.98 |
|
European Smaller Companies |
1.74 |
|
Global EM Bonds Hard Currency |
1.17 |
|
Europe Including UK |
1.03 |
|
Asia Pacific Excluding Japan |
0.9 |
Source: FE Analytics, performance from 31st August to 30th September 2020 in pounds sterling on a total return basis
The UK had a tough month and faced several headwinds in September. The fear of a second lockdown, messy Brexit negotiations and the possibility of negative interest rates all weighed on the region. The UK stock market suffered because of its exposure to oil, mining and financials amongst others. These areas are reliant on a sustained economic recovery, a second lockdown, in particular, would delay this, while negative interest rates would significantly hit banks’ profitability.
Whilst the oil price was fairly stable during September, the possibility of a second wave resulting in further lockdowns and disruption hit the energy sector as demand is expected to recover more slowly as a result.
Schroder ISF Global Energy led the sector’s worst performers, whilst Ninety One UK special situations lead the value/recovery stocks lower. Exposure to Travis Perkins, Easyjet, Royal Dutch Shell all helped to deliver a negative return in September.
10 worst-performing sectors
|
Investment Association Sector |
Percentage |
|
UK Equity Income |
-2.3 |
|
UK All Companies |
-1.76 |
|
UK Equity & Bond Income |
-1.56 |
|
UK Smaller Companies |
-1.2 |
|
Property Other |
-0.88 |
|
Sterling High Yield |
-0.88 |
|
Mixed Investment 20-60% Shares |
-0.41 |
|
Mixed Investment 40-85% Shares |
-0.37 |
|
Flexible Investment |
-0.33 |
|
North America |
-0.31 |
Source: FE Analytics, performance from 31st August to 30th September 2020 in pounds sterling on a total return basis
10 worst-performing funds
|
Funds |
Percentage |
|
Schroder ISF Global Energy |
-15.43 |
|
TB Guinness Global Energy |
-12.17 |
|
Guinness Global Energy |
-11.56 |
|
BlackRock GF World Energy |
-10.35 |
|
HSBC GIF Brazil Equity |
-7.89 |
|
VT Cape Wrath Focus |
-7.85 |
|
Ninety One UK Special Situations |
-7.6 |
|
GS North America Energy & Energy Infrastructure Equity Portfolio |
-7.35 |
|
Aviva Inv UK Listed Equity High Alpha |
-7.28 |
|
Man GLG Undervalued Assets |
-7.07 |
Source: FE Analytics, performance from 31st August to 30th September 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.