The funds and investment trusts that enjoyed the biggest Boris bounce – with investors in the top dog bagging 16% in a month

  • Research from AJ Bell finds UK-focused funds have seen widespread gains
  • Bounce after last month’s General Election saw average UK fund climb 5%
  • But smaller companies did even better and dominate best performers 
  • Investment trusts delivered better average performance than funds 

Funds and trusts invested in the UK have seen a significant bounce since December’s General Election saw Boris Johnson’s Conservative party win a decisive majority.

Top performing trust, JPMorgan Smaller Companies, was up almost 16 per cent in just one month. 

After years of stunted flows amid uncertainty over the UK’s political backdrop, the average UK All Companies fund climbed 5.1 per cent between 12 December 2019 and 10 January 2020, according to AJ  Bell. 

But UK smaller companies funds performed even better, up 7.8 per cent on average, with the top performer, VT Teviot UK Smaller Companies, up more than 11 per cent.

Boris Johnson led his Conservative party to victory following the General Election last month

Boris Johnson led his Conservative party to victory following the General Election last month

Investment trusts focussed on British firms have been the real winners since the election, however, with UK All Companies trusts delivering 8.2 per cent on average, UK Smaller Companies 8 per cent, and UK Equity Income 5.1 per cent. 

The more than 5 per cent gain for UK All Companies funds compares with a loss of 0.08 per cent during the previous 30-day period and a return of only 1.74 per cent during the same period the previous year.

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The UK Equity Income sector has also risen 5.1 per cent since the election.

However, those figures compare to a 4.3 per cent rise for the stock market, as measured by the broad FTSE All-Share index, over the same period. 

The FTSE All Share stock market saw a 4.3% rise in the month after the election

The FTSE All Share stock market saw a 4.3% rise in the month after the election

Laura Suter, personal finance analyst at AJ Bell, said: ‘Sentiment towards UK stocks has dramatically improved since the December general election, as evidenced by widespread gains among UK focused funds and investment trusts. 

‘The large majority gained by the Conservatives fuelled a Boris Bounce as investors hurried back into domestically focused companies that had been out of favour for so long.’

Top performing funds

Looking across all UK-focused funds, the highest performer was the VT Teviot UK Smaller Companies fund, which has returned 11.34 per cent since the election.

The £67million fund, managed by Andrew Bamford and Barney Randle, invests in a diversified portfolio of stocks from the bottom 10 per cent of the UK stock market in terms of company size. 

Several other micro and small cap funds were among the best performers during the period, including Liontrust’s UK Micro Cap fund (up 10.38 per cent), Schroder UK Smaller Companies (up 10.29 per cent) and Investec UK Smaller Companies (up 9.85 per cent). 

Top 10 UK-focused open ended funds since the general election 
Fund Performance 12/12/19 – 10/01/20
VT Teviot UK Smaller Companies 11.34%
SVM UK Opportunities 11.05%
Liontrust UK Micro Cap 10.38%
Schroder UK Smaller Companies 10.29%
TM Cavendish AIM 10.05%
Investec UK Smaller Companies 9.85%
Threadneedle UK Smaller Companies 9.81%
Liontrust UK Smaller Companies 9.62%
Premier UK Growth 9.38%
Schroder Institutional UK Smaller Companies 9.17%
Source: AJ Bell/FE Analytics 
 Top 10 UK-focused investment trusts since the general election
Investment trust Performance 12/12/19 – 10/01/20
JPMorgan Smaller Companies          15.74%
SVM UK Emerging Fund 14.05%
Schroder UK Mid Cap            13.68%
Downing Strategic Micro-Cap            12.09%
Odyssean Investment Trust   11.76%
Henderson Opportunities Trust           11.73%
Henderson Smaller Companies         10.73%
Standard Life UK Smaller Companies Trust  10.52%
Lowland Investment Company           10.42%
Aberdeen Smaller Companies Income Trust             9.49%
Source: AJ Bell/FE Analytics 

Top performing trusts 

At the top of the  investment trust table was the £245million JPMorgan Smaller Companies investment trust, managed by Georgina Brittain and Katen Patel, which returned 15.74 per cent in just under a month. 

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Suter added: ‘UK-focused investment trusts had been on stubbornly wide discounts to their net asset value in the lead-up to the election, but benefited from a boost to share prices in the Boris rally as investors bid up UK stocks.

‘The managers of JPMorgan Smaller Companies seek to own companies with a competitive edge, frequently operating in niche growth markets, which rather than being dependent on GDP are forging their own growth. 

‘Hot on its heels since the election with a 14 per cent gain is the SVM UK Emerging, a growth companies fund managed by Margaret Lawson and Colin McLean with a bias towards consumer services, financials and industrials.

‘Another notable gainer since Boris Johnson bagged his comfortable working majority is Schroder UK Mid Cap, with sentiment towards the FTSE 250 index turning positive as the index is perceived as a proxy for the UK’s domestic economy.’ 

UK-focused fund performance since the 2019 General Election 
Sector  Performance 12/12/19 – 10/01/20 
Investment trusts – UK All Companies
Investment trusts – UK Smaller Companies
Funds – UK Smaller Companies
Investment trusts – UK Equity Income
Funds – UK All Companies
Funds – UK Equity Income
8.2%
8.0%
7.8%
5.1%
5.1%
5.1%
Source: AJ Bell/FE Analytics

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