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UK smaller companies dominate December list for best performing funds

News Team, 06/01/2020

Last month, UK-focused smaller companies was one of the best-performing fund sectors in the investment industry, according to new data released by Morningstar.

In its December report on the top 10 best performing funds, eight of the featured high-performers were focused on UK smaller companies.

The financial service firm attributes this dominance to Boris Johnson’s success at the ballot box earlier last month, which boosted both the UK’s currency and stock market, with the FTSE 250 hitting an all-time high and sterling ascending to its highest level since the referendum result.

Following multiple months of being out of favour, UK-focused funds appear to be on track, with the Merian Smaller Companies Focus fund finishing top of the charts. Regarded as the best performer, it delivered a return of 9.4 performed. Across 2019, it outperformed its benchmark, the FTSE Small Cap Index, by 7.8 percentage points.

The Franklin UK Smaller Companies fund finished third for the month, with a return of 8.8 percent, while Aberforth UK Smaller Companies also finished in the top five with an 8.4 percent return. Meanwhile, the rankings between sixth and tenth were exclusively filled with UK smaller companies funds, including funds managed by ASI, Artemis, Liontrust, TB Amati, while a second Merian fund also made the list. The funds posted returns between 7.4 and 8.1 percent. The only non-UK smaller companies funds in the top 10 were the BlackRock World Gold fund and BGF Latin American fund.

Meanwhile, Morningstar also listed its worst performing funds for the month, with the Jupiter India scoring the lowest returns of -3.8 percent. It was not the only Indian fund to feature on a list dominated by property and real estate funds, with the Stewart Investors Indian Sustainability fund ranked as the ninth worst performing fund with returns of -2.3 percent.

The report follows the results of the annual poll released by the Association of Investment Companies, which showed comapny managers predicting that the UK would provide the best stock market return in 2020.

Morningstar - December Top 10 Best Performing Funds

Fund Name
Return (percent)
Merian UK Smaller Companies Focus
9.4
BlackRock World Gold
9.2
Franklin UK Smaller Companies
8.8
BGF Latin American
8.7
Aberforth UK Small Companies
8.4
ASI UK Smaller Companies Inst
8.1
Merian UK Smaller Companies
7.9
Artemis UK Smaller Companies
7.9
Liontrust UK Smaller Companies
7.7
TB Amati UK Smaller Companies
7.4
Source: Morningstar Direct

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