Revealed: scale of plunging fund performance in March

Many popular equity funds fell more than 22% in March, according to analysis from an online investment provider.

As the Coronavirus outbreak hit markets, UK Smaller Companies funds fell by an average of 22.56% in March, UK All Companies by 18.51% and UK Equity Income by 18.42%.

Some energy funds saw 40%+ falls due to a “double whammy” of oil price wars and Coronavirus, according to research by Willis Owen

Overall, among the Investment Association fund sectors UK funds were among the worst performers in March.

Despite the disastrous performance there were some bright spots. UK Gilts funds managed a 1.63% rise and some funds did well with Argonaut Absolute Return up 15%, VT Lambda Investment up 11.23% and Lindsell Train Japanese Equity up 10.5%.

The Top 10 Best and Worst Performing IA fund sectors and funds analysed by Willis Owen are listed here:

10 best-performing sectors

Source: FE Analytics, performance from 29 February 2020 to 31 March (in pounds sterling on a total return basis)

10 best-performing funds

Source: FE Analytics, performance from 29 February 2020 to 31 March (in pounds sterling on a total return basis)

10 worst-performing sectors

Source: FE Analytics, performance from 29 February 2020 to 31 March (in pounds sterling on a total return basis)

10 worst-performing funds

Source: FE Analytics, performance from 29 February 2020 to 31 March (in pounds sterling on a total return basis)

Adrian Lowcock, head of personal investing at Willis Owen, said: “March was a month to forget for most investors, with some of the worst falls seen for more than a decade. The speed of the Coronavirus-induced sell-off caught investors by surprise, reversing hopes that the virus would be contained in China and sending stockmarkets around the world into freefall.

“In troubled times investors flock to safety, and the best performing sectors were those that investors see as defensive. UK government gilts offered the only positive returns of all the IA sectors, as bond yields tumbled in anticipation of huge government support, and amid a desire to liquidate everything with any risk attached to it.

“Property featured in the best performing sectors, but given that many funds have been suspended in March because the independent valuers could no longer accurately value the properties, the performance figures are unlikely to be accurate and should effectively be ignored.”

“At a fund level, the Argonaut Absolute Return fund delivered the strongest performance of all the funds in the IA universe thanks to its short positions in financials and industrials. Absolute Return funds have done a better job of protecting capital so far in this crisis, with the wider sector only down 4.9% in March. Lindsell Train Japanese Equity is also a stand out fund as it has already been a strong performer prior to the crisis. The fund’s quality focus and bias to pharmaceuticals and technology helped it deliver strong returns in March.”