The best and worst investments of 2020

As 2020 draws to a close, Darius McDermott, managing director of Chelsea Financial Services, takes a look at which funds and sectors are likely to find themselves on Santa’s nice list, and which are well and truly on the naughty list:

Best and worst performing sectors of 2020

“With much of the world working from home in 2020 and many months spent in lockdown, the technology sector has been one of the beneficiaries of the pandemic,” Darius commented.

“From online shopping to kitting out the home office, both software and hardware have been in demand, along with many other internet services. So it’s perhaps no surprise that the IA Technology and Telecommunications sector has been the best performer, up some 42.1%*.”

The second best-performing sector is IA China/Greater China (29.4%*), while IA Asia Pacific including Japan is third (24.4%*), IA North American Smaller Companies fourth (21.3%*), and IA Asia Pacific ex Japan fifth (18.44*).

At the other end of the performance table, just 5 out of 39 sectors are in negative territory. “Encumbered by Brexit and a value-biased stock market, the UK equity sectors have been the worst performers this year,” continued Darius.

The IA UK Equity Income sector is the worst performer, down 11.9%* year to date. The second worst is IA UK Equity & Bond Income (-8.2%*) and third is IA UK All Companies (-7.9%*). Only the IA UK Smaller Companies sector managed to get back into the black (1.1%*).

“Fourth and fifth worst were the property sectors, with IA Property Other down 7.2% and IA UK Direct Property down 3.5%*,” Darius said. “Both have been hit hard by trading suspensions and uncertainty over the future of the office sector.”

Rank Sector Percentage returns year to date**
1 IA Technology & Telecommunications 42.1%
2 IA China/Greater China Growth 29.4%
3 IA Asia Pacific including Japan 24.4%
4 IA North American Smaller Companies 21.3%
5 IA Asia Pacific excluding Japan 18.4%
35 IA UK Direct Property -3.5%
36 IA Property Other -7.2%
37 IA UK All Companies -7.9%
38 IA UK Equity & Bond Income -8.2%
39 IA UK Equity Income -11.9%

Best and worst performing funds of 2020

“When it comes to individual funds, a number of Baillie Gifford’s offerings have been outstanding this year,” continued Darius. “No fewer than five of the top ten performing funds in 2020 are managed by the company – three in the top five.”

The best fund overall has been Baillie Gifford American, which has returned 118.3%** year to date. Baillie Gifford Long term Global Growth Investment is second (93%**) and Baillie Gifford Positive Change third (80.5%**)

The worst performing fund is the LF Equity Income fund – previously LF Woodford Equity Income. It is down 62.98%** year to date. Second worst is Guinness Global Energy, down 34.31%**, with Jupiter UK Growth in third, down 26.38%**.

“Many energy funds have suffered this year due to excess supply and lower demand for oil,” Darius said. “In what has been an extraordinary year, we saw the price of oil turn negative at one point. Renewable energy funds have performed much better, as evidenced by Guinness Sustainable Energy fund which is in the top ten best performing.”

Best performing funds in 2020**

Rank Fund Percentage returns year to date*
1 Baillie Gifford American 118.25%
2 Baillie Gifford Long Term Global Growth Investment 92.98%
3 Ballie Gifford Positive Change 80.51%
4 Morgan Stanley US Advantage 69.96%
5 T. Rowe Price Global Technology Equity 68.48%
6 Baillie Gifford Global Discovery 67.98%
7 Baillie Gifford Global Stewardship 67.26%
8 Premier Miton US Smaller Companies 62.72%
9 Carmignac Portfolio Emergents 59.44%
10 Guinness Sustainable Energy 57.85%

Worst performing funds in 2020**

Rank Fund Percentage returns year to date**
1 LF Equity Income -62.98%
2 Guinness Global Energy -34.31%
3 Jupiter UK Growth -26.38%
4 TM Stonehage Fleming UK Balanced Income -25.10%
5 Premier Miton Monthly Income -23.17%
6 Invesco UK Equity High Income -22.92%
7 Premier Miton Optimal Income -22.84%
8 Invesco UK Equity Income -22.54%
9 Premier Miton Income -21.97%
10 BNY Mellon Brazil Equity -21.31%

*Source: FE Analytics, total returns in sterling, all Investment Association sectors and funds, 1 January 2020 to 9 December 2020.

**Source: FE Analytics, total returns in sterling, all Investment Association sectors and funds, 1 January 2020 to 9 December 2020. All funds available on the Aegon platform.

Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. Darius’s views expressed are his own and do not constitute financial advice.

Published on 14/12/2020