Best and Worst Performing Funds in April

Gold and equity funds are among the best performers with gains of up to 40%, while bonds lag behind

Annalisa Esposito 05/05/2020 17:39:00

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With much of the world in lockdown and uncertainty rife, there was one clear winner in the fund stakes in April: gold. The yellow metal is historically a safe haven asset and investors traditionally flock to it during periods of unease. Their reaction in the middle of a global pandemic was no different; the gold price is up 32% from a year ago. 

We’ve looked at the April performance of funds that are rated by Morningstar analysts to find the winners and losers from a fraught month on the market. BGF World Gold and BlackRock Gold and General, both Bronze-Rated by Morningstar analysts, topped the table of best performing funds in April, producing incredible returns of 40.7% and 40% each. The stellar numbers also puts them in the top ten performers year to date, returning 21.2% and 11.3% respectively so far in 2020 - not bad considering the wall-to-wall falls across markets in March.  

Also among the top performers in April were two natural resources funds: JPM Natural Resources and JPM Global Natural Resources, both Neutral-Rated by Morningstar analysts. This might seem strange when considering that oil was probably the asset most under pressure as demand has fallen off a cliff; the price of the black stuff briefly went negative as suppliers struggled to offload the commodity.

But a deeper dive in the fund's top holdings reveals how these funds managed to avoid getting caught up in the turmoil. Among JPM Natural Resource's biggest stakes a gold miners Barrick and Newmont, while the fund also holds cooper and steel-focused comapnies, commodities which have been less sensitive to the recent volatility. 

Best Performing Funds

The rest of the best performing funds are global, UK- or US-focused. They have been able to benefit from the rally across many developed markets, as they have started to bounce back from their nadir. The FTSE 100, for example, recovered about 8% in April and the S&P500 almost 18%. The tech-heavy Nasdaq fared even better, up more than 20% in the month. Ben Yearsley, Director, Shore Financial Planning says: “Investors who kept their nerve when markets imploded at the tail end of March were rewarded last month.”

Baillie Gifford Wordwide Discovery and Global Discovery, Silver and Bronze-Rated by Morningstar analysts, were up 21.4% and 20%, while the TB Abati UK Smaller Companies and Merian UK Mid-Cap funds posted returns of more than 19%.

Fund Rating April Return (%)
BGF World Gold Bronze 40.66
BlackRock Gold and General Bronze 40.00
Baillie Gifford WW Discovery  Silver 21.41
JPM Natural Resources Neutral 20.80
Baillie Gifford Global Discovery  Bronze 20.03
JPM Global Natural Resources Neutral 19.73
TB Amati UK Smaller Companies  Bronze 19.05
Merian UK Mid Cap  Bronze 19.04
Legg Mason IF Royce US Smlr Cos Neutral 18.74
JOHCM UK Growth  Silver 17.44

Source: Morningstar Direct. May 4, 2020

Worst Performing Funds

But not all asset classes were able to rally in April; seven of the 10 weakest funds of the month were fixed income-focused, a sign that investors may be moving away from bonds in favour of equities again.

Fund group Templeton has four funds in the list: Templeton Global Total Return leading the way, the Templeton Emerging Markets Bond, the Templeton Global Bond and the Templeton Global Return, which were down between 1.2% and 0.7%. One perennial underperformer has reappeared too; Neutral-rated Jupiter Absolute Return, which was down 1.87%. Manager James Clunie is known for his contarian call and has been hurt in recent years by large bets against thriving tech names such as Tesla. 

May is typically a time that investors consider selling up for the summer months as per the investment adage "Sell in May and don't come back until St Leger's Day". However, with many portfolios still nursing heavy losses, investors may be inclined to take heart from some of April's performance figures and stay in the market this year. 

Fund Rating April Return (%)
Polar Capital Global Ins Silver -2.20
Jupiter Absolute Return Neutral -1.87
Vanguard US Gov Bond Index Silver -1.17
Templeton Global Total Return  Bronze -1.16
Templeton Emerging Markets Bond Neutral -1.05
Templeton Global Bond Silver -0.87
Templeton Global Total Return Bond Bronze -0.74
iShares Overseas Govt Bond Index Bronze -0.49
Alma Platinum IV Systematic Alpha Neutral -0.39
BlueBay Inv Grd Euro Gov Bond Bronze -0.38

Source: Morningstar Direct. May 4, 2020

About Author

Annalisa Esposito  is a data journalist for Morningstar.co.uk

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