The funds hit hardest by the violent stock market sell-off



Hundreds of funds have slumped to double-digit weekly losses as stock markets have tumbled amid fears over the spread of the coronavirus.

Morningstar data shows 350 funds registered for sale to UK investors have suffered a loss of 10% or more over the rolling week to yesterday, not including the impact of renewed stock market falls today.

It’s a measure of how violent and indiscriminate the stock market sell-off has been that the hardest-hit funds are focused on varying sectors and geographies and employ different approaches.

US funds have broadly fared the worst, but some UK funds have been hit equally hard. Technology funds and those with a heavy growth focus have tumbled, but so too have recovery, special situations and value funds.

Funds investing in perceived safe havens, like government bonds and gold, have risen, while one fund run by bearish fund manager Tim Bond has soared.

Oil funds slump

Among funds readily accessible to UK investors, the £126m Guinness Global Energy has been worst hit, tumbling 12.4% as the price of a barrel of Brent crude oil has tumbled from $58.50 to $50.55 over the last week. Junior Oils has fallen 11.3% and T Rowe Price Global Natural Resources is down 10.2%.

While funds in the Investment Association’s North America sector litter the bottom of the performance charts over the last week, a UK strategy is one of the heaviest fallers.

Neil Vetich’s £147m SVM UK Opportunities fund has tumbled 12.2%, hurt by positions in tumbling airline shares International Airlines Group (IAG), Ryanair (RYA.I) and Wizz Air (WIZZ), a 15% weighting to oil and gas companies and a broad bias towards cyclical stocks more exposed to the fluctuations of the global economy.

The fund is the worst performer in the Investment Association’s UK All Companies sector over the last five days and is joined at the bottom by Premier UK Growth, down 10.7%.

Two of the worst performing funds in the sector over the last five years continued to be hit hard this week. 

The £958m Jupiter UK Growth fund, whose poor performance has culminated in the announcement this week that manager Steve Davies was leaving the fund group, fell 10.1% over the week to yesterday. 


The £1.9bn M&G Recovery fund, dropped from Hargreaves Lansdown’s Wealth fund buy list last year and sold from the online stockbroker’s HL Multi-Manager Balanced Managed fund, fell 10%.

Those two funds were among a host of value, recovery and special situations funds to perform poorly this week.

Growth and value suffer 

The £178m Investec Global Special Situations fund, featuring a heavy weighting to US banks, fell 10.8% while Miton UK Value Opportunities was down 9.7%.

But at the other end of the investment style spectrum to value funds, those focused on technology and growth stocks were also hit hard.

The £701m AXA Framlington WF Robotech fund fell 11.8% while the £1.1bn Janus Henderson Global Technology fund was down 9.9%.

Funds with a broader focus on growth stocks joined them at the bottom of the week’s performance charts. The £842m Baillie Gifford Global Discovery fund was down 9.5% while the Edinburgh fund group’s £2.5bn American fund fell 9.2%, as its £8bn Scottish Mortgage (SMT) investment trust languished at the bottom of the FTSE 100.

Latin American funds also fared particularly poorly. The £389m Threadneedle Latin America fund fell 11% and Invesco’s £119m Latin American fund was down 10.5%.

The UK’s largest fund, the £19.3bn Fundsmith Equity, fell 7.4%, as Citywire AAA-rated manager Terry Smith this week told investors he was ‘pretty relaxed’ about the impact of the coronavirus on his strategy. 

Citywire AA-rated Nick Train’s £6.6bn Lindsell Train UK Equity fund fell 6.8% while his Lindsell Train Global Equity fund was down 5.7%.

Havens rally, bear gains

Bond funds rallied amid the flight to safety over the week, with those investing in UK index-linked gilts performing particularly well. Index-linked gilt funds run by Baillie Gifford, AXA and BNY Mellon were up 3.4%, 3.2% and 3.1% respectively.

Among bond funds with a broader remit, the £767m Allianz Strategic Bond fund was among the best performers, while the £888m Ruffer Gold fund rose 2.7% as investors flocked to the precious metal.

The standout performer of the week was the small £55m Odey Odyssey fund run by bearish fund manager Tim Bond, which surged 11.8%. 

But that represents just a small fillip to long-suffering investors in the fund, who have seen their holdings more than halve over the last five years.

Original article by originally appears at Citywire Funds Insider