The top performing funds since the depths of the global financial crisis

Shares have recovered strongly since the market trough a decade ago. Rob Morgan looks at which funds have come out on top.

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  1. Rob Morgan

Triggered by the collapse of the US subprime housing market, the global financial crisis caused the deepest recession in living memory and a near collapse of the financial system. Banks and institutions such as Lehman Brothers and Northern Rock failed, stock markets crashed and authorities struggled to contain the fall out. We are still feeling the effects today with sluggish growth and low inflation, and some attribute the rise of populist politics to the financial events of 2007 to 2009.

During the worst part of the crisis Japanese and European shares lost around half their value, US shares fell by more than a third, while the UK market lost over 45%. March 3rd 2009 was the trough for the FTSE 100, which closed at 3,512 points having seen a peak of 6,732 less than a year and a half earlier.   

The prevailing sentiment was that policy-makers were losing control, and there seemed to be unrelenting bad economic and corporate news. For instance, HSBC had just announced a rights issue having previously avoided any form of capital raising. Yet it was at this point of despair that the current decade-long bull market was born.

The effect of central bank attempts to stimulate the economy eventually resulted in a dramatic turnaround. Low interest rates and fresh money injected into the financial system through quantitative easing restored confidence and ultimately benefited many businesses.

It is impossible to time markets, but those lucky (and brave) enough to have invested at the lows a decade ago would have likely been rewarded with handsome returns, albeit with some considerable shorter term falls along the way. Below are the top performing funds over this period.

Table: Top ten onshore retail funds over ten years

Past performance is not a reliable indicator of future returns. Figures are shown on a % total return basis, bid to bid price with net income reinvested; Source: FE Analytics, data for ten year performance: 03/03/2009 to 03/03/2019. Onshore and retail open-ended funds only.

The technology sector in particular has performed remarkably well since driven by the surging share prices of the likes of Apple, Amazon and Facebook. AXA Framlington Global Technology was the top tech fund, benefitting from holding a variety of leading stocks since 2008 including Apple and  Alphabet since.

While not a technology fund, Legg Mason IF Japan Equity, which invests heavily in emerging Japanese technology companies came out as the top performer. The fund’s sector bias is part of an investment theme the manager Hideo Shiozumi dubs the “New Japan”, focusing on high growth parts of the economy.

Growth orientated areas are also the hallmark of the Baillie Gifford funds on the list. The managers have focused on high quality, high growth stocks during the period, many of which would have been trading at distressed valuations during the global financial crisis.

A number of UK smaller company funds also provided stellar returns. Chief among these was Fidelity UK Smaller Companies Fund managed by Alex Wright, a fund manager our Collectives Research Team hold in high regard for his stock picking prowess and disciplined ‘value’ style. The fund has multiplied investors money by over seven times over the period but  is no longer available for new investment. Elsewhere in the sector TB Amati UK Smaller Companies also produced an excellent return, as did Schroder UK Dynamic Smaller Companies and Slater Growth.

Past performance is not a reliable guide to future returns. This website is not personal advice based on your circumstances. No news or research item is a personal recommendation to deal. Investment decisions in fund and other collective investments should only be made after reading the Key Investor Information Document or Key Information Document, Supplementary Information Document and Prospectus. If you are unsure of the suitability of your investment please seek professional advice.

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