Experienced Investor
The top performing investments of 2021 so far
Investors who have backed areas of the market which have been “badly beaten up” by the pandemic have seen impressive returns in the first quarter of 2021.
That’s according to new analysis from AJ Bell, which has broken down the sectors, funds and trusts which have performed best so far this year.
Where should I have put my money?
Looking on a sector basis, the top performer to date has been the UK smaller companies, which has seen a 9% increase over the quarter.
That’s substantially better than North American smaller companies in second place at 6.9%, just edging out UK equity income at 6.9%.
By contrast, it’s been a horrible time for those putting their money in bonds and gilts. Worst of all is the global EM bonds local currency sector, which has shrunk 8.1%, followed by UK gilts at 7.4%.
The best funds and trusts
Of course, within those sectors there will be some investments that have performed brilliantly, and others that need improvement.
Starting with funds, top of the tree is the Schroder ISF Global Energy, which has delivered an astonishing 25.2% growth over the quarter.
Here’s how the top funds shape up:
| Fund | Q1 Performance % |
| Schroder ISF Global Energy | 25.2 |
| M&G Japan Smaller Companies | 22.9 |
| VT De Lisle America | 22.7 |
| Guinness – Global Energy | 20.5 |
| Premier Miton UK Smaller Companies | 20.4 |
| Aberforth UK Small Companies | 19.8 |
| VT Cape Wrath Focus | 19.3 |
| TM RWC UK Equity Income | 17.1 |
| Barings Global Agriculture | 17.1 |
| Legg Mason IF ClearBridge US Equity | 17.0 |
Source: FE Total return 31/12/2020 to 31/03/2021, sterling denominated funds only
However, pick the right investment trust and you can enjoy even more impressive returns, as the table below demonstrates:
| Investment trust | Q1 performance % |
| All Active Asset Capital Limited | 184.9 |
| Agronomics Limited | 135.8 |
| Drum – Income Plus Reit | 73.6 |
| Drum – Drum Plc | 44.3 |
| Tirupati Graphite PLC | 43.9 |
| Tiger Royalties And Investments PLC | 42.9 |
| Hammerson PLC | 40.8 |
| Seneca Growth Capital VCT PLC | 39.6 |
| New City Investment Managers – Geiger Counter | 38.3 |
| Miton UK MicroCap Trust PLC | 37.1 |
Source: FE Total return 31/12/2020 to 31/03/2021
Investment trusts enjoyed an excellent 2020 too, delivering record payouts despite the pandemic.
Don’t miss out on a “resurgent” market
Laith Khalaf, financial analyst at AJ Bell, noted that funds investing in commodities and even shopping centres were having a good quarter, while the US market was also doing well with the S&P having broken through the 4,000 ceiling for the first time.
He added: “UK equity funds also enjoyed a rare glimpse of the top of the performance tables, thanks in part to the cyclical make-up of the UK stock market, and the reassessment of the prospects for these economically sensitive stocks that has taken place since the arrival of effective vaccines.”
However, he noted that many investors are turning their back on the UK market. According to data from the Investment Association, as much as £1.7bn was withdrawn from UK equity funds in the first two months of the year.
Khalaf continued: “These investors could find themselves missing out on a resurgent UK stock market, if the global economy performs as expected this year, as the banks and commodity stocks that play such a big part in the FTSE 100 should do well in an expansionary economic environment.”
This follows recent research which highlighted that the dividend tap is ‘being turned back on’ following the pandemic.