Reverse Bonkers - The worst funds since mid-February

First, the rationale. Buying the worst performing funds or stocks assuming a bounce must lie ahead does not work as an investment strategy – most of the time.  There is one very important exception, and that is when markets or sectors fall rapidly, which tends to bring down the good with the bad. Amongst the worst performers are funds with considerable “bounceability”, and they sit alongside perpetual duds – obviously it is important to identify the former, and avoid the latter.  In coming weeks we will look in more detail at how to do that.

 

To get this going, below are three set of data, each including a top 10 and bottom 10 since the peak of 20^th February:

 

Not surprisingly, in section 1 the top funds are dominated by global bond funds. They benefitted from two elements – a falling pound and better quality government bond funds holding steady.  Brazil and some energy funds feature amongst the duds. But UK-invested funds dominate the bottom 10 – look out for opportunities amongst these, but don’t jump the gun.

 

In section 2, UK equities, even the best funds look ugly, and the worst funds are edging towards losses of 50% in just one month.  Amongst the bottom funds are some with considerable attractions once there are signs of the market bottoming.

 

In section 3, UK non-Government bonds, the best funds are mostly short-dated and high quality – so naturally less volatile – though only one is positive over the month. Amongst the bottom funds I again see funds I would want to buy as the market turns.

 

In coming weeks I will expand this discussion, and identify specific funds for a pending buy-list.  Do let us know your thoughts on this.

 

 

 

 

Best 

Name	Sector	Fund Size(m)	Performance
Vanguard Japan Government Bond Index	IA Global Bonds	478.7	12.1
Scottish Widows International Bond	IA Global Bonds	204.9	12.0
MFS Meridian US Government Bond	IA Global Bonds	318.2	9.4
Wellington Global Total Return (UCITS)**	IA Targeted Absolute Return	135.1	9.4
GS US Mortgage Backed Securities Portfolio	IA Specialist	314.3	9.3
Standard Life Investments Global Bond	IA Global Bonds	341.2	9.2
iShares Overseas Government Bond Index (UK)	IA Global Bonds	1982.5	8.7
T. Rowe Price Global Aggregate Bond	IA Global Bonds	418.1	8.3
Wellington World Bond	IA Global Bonds	240.3	7.8
Pimco GIS Euro Short-Term	IA Global Bonds	655.4	7.8

Worst

Name	Sector	Fund Size(m)	Performance
Schroder ISF Global Energy	IA Global	189.6	-59.5
BlackRock GF World Energy	IA Specialist	919.6	-48.7
Guinness Global Energy	IA Global	67.6	-48.2
Aberforth UK Small Companies	IA UK Smaller Companies	186.8	-47.8
Merian UK Mid Cap	IA UK All Companies	1865.5	-47.5
ASI UK Unconstrained Equity	IA UK All Companies	369.8	-47.3
ASI UK Recovery Equity	IA UK All Companies	115.7	-46.7
Liontrust UK Mid Cap	IA UK All Companies	71.3	-46.0
JPM Brazil Equity	IA Specialist	66.7	-45.6
Merian UK Dynamic Equity	IA UK All Companies	291.5	-45.5

 

Sterling Bond Sectors

Best

Name	Sector	Fund Size(m)	Performance
Allianz Strategic Bond	IA Sterling Strategic Bond	1101.1	5.2
Waverton Sterling Bond	IA Sterling Strategic Bond	245.3	-0.8
Hermes Unconstrained Credit	IA Sterling Strategic Bond	419.8	-1.6
Rathbone High Quality Bond Fund	IA Sterling Corporate Bond	223.2	-2.5
AXA Sterling Credit Short Duration Bond	IA Sterling Corporate Bond	674.5	-3.0
M&G UK Inflation Linked Corporate Bond	IA Sterling Strategic Bond	801.3	-3.0
AXA Sterling Strategic Bond	IA Sterling Strategic Bond	156.3	-3.2
M&G Short Dated Corporate Bond	IA Sterling Corporate Bond	315.7	-3.3
Vanguard UK Short-Term Investment Grade Bond Index	IA Sterling Corporate Bond	1962.9	-3.3
Royal London Investment Grade Short Dated Credit	IA Sterling Corporate Bond	1404.8	-3.4

 

Worst

Name	Sector	Fund Size(m)	Performance
Legg Mason Western Asset Macro Opportunities Bond	IA Sterling Strategic Bond	5075.4	-21.3
Baillie Gifford High Yield Bond	IA Sterling High Yield	635.5	-21.3
GS Europe High Yield Bond Portfolio	IA Sterling High Yield	64.7	-20.8
Schroder High Yield Opportunities	IA Sterling High Yield	512.3	-20.5
Kames High Yield Bond	IA Sterling High Yield	446.0	-19.7
T. Rowe Price Global High Income Bond	IA Sterling High Yield	306.9	-19.4
Baring Global High Yield Bond	IA Sterling High Yield	1572.5	-19.1
Baring European High Yield Bond	IA Sterling High Yield	489.2	-18.9
Artemis High Income	IA Sterling Strategic Bond	1088.8	-18.6
L&G High Income Trust	IA Sterling High Yield	1286.5	-18.2

 

UK Equity Sectors

Best

Name	Sector	Fund Size(m)	Performance
Ardevora UK Equity	IA UK All Companies	142.3	-22.7
Lindsell Train LF Lindsell Train UK Equity	IA UK All Companies	5946.4	-25.6
LF Miton UK Multi Cap Income	IA UK Equity Income	907.7	-25.6
Aviva Inv UK Equity MoM 1	IA UK All Companies	274.7	-25.7
Investec UK Equity Income	IA UK All Companies	96.3	-25.7
Troy Asset Management Ltd Trojan Income	IA UK Equity Income	3150.2	-25.9
TB Evenlode Income	IA UK All Companies	3757.0	-26.6
Royal London Sustainable Leaders Trust	IA UK All Companies	891.9	-26.7
Virgin UK Index Tracking	IA UK All Companies	2916.8	-26.7
JOHCM UK Opportunities	IA UK All Companies	368.5	-27.0

 

Worst

Name	Sector	Fund Size(m)	Performance
Aberforth UK Small Companies	IA UK Smaller Companies	186.8	-47.8
Merian UK Mid Cap	IA UK All Companies	1865.5	-47.5
ASI UK Unconstrained Equity	IA UK All Companies	369.8	-47.3
ASI UK Recovery Equity	IA UK All Companies	115.7	-46.7
Liontrust UK Mid Cap	IA UK All Companies	71.3	-46.0
Merian UK Dynamic Equity	IA UK All Companies	291.5	-45.5
Jupiter UK Growth	IA UK All Companies	444.3	-45.2
Aviva Inv UK Listed Equity High Alpha	IA UK All Companies	207.9	-45.1
Schroder UK Mid 250	IA UK All Companies	621.0	-44.8
Aviva Inv UK Listed Equity Unconstrained**	IA UK All Companies	176.7	-44.4