- The fund with the highest growth of the past year was the Baillie Gifford American with 102.54%.
- The Matthews China Small Companies fund was the number one growth fund in the IA China/Greater China sector not only over the past year but also over the past 3 and 5 years.
- By analysing the performance of all funds and markets over the past year it is apparent that the funds with a history of strong performance typically performed better over the course of the year.
The covid19 crisis has caused economic destruction for many with whole industries failing and unemployment at the highest levels in recent history. But despite the fallout from the pandemic and the challenges it has posed, investment markets, on a whole have returned growth for the year with some sectors growing at a near vertical rate since the market slump in March.
A portion of the funds within these sectors have excelled with some delivering growth of 100% for the year and others outperforming the sector average ten fold. In this report, we feature 10 funds that have been among the highest growth funds of 2020, some of which have also consistently outperformed their peers over the past 5 years. We also include a detailed performance list of 100 of the top performing funds of the past 12 months.
Top Quality Funds With A Proven Performance History
By analysing the performance of all funds and markets over the past year what becomes apparent is that the funds with a history of strong performance typically performed better over the course of the year than those with a chequered past, which reinforces the belief that funds with a proven track record are more likely to continue to excel during periods of high market volatility. Below we feature a summary of 10 of the top performing funds of this year but further on down we feature a table of 100 of the top performing funds of 2020.
Baillie Gifford American
The fund’s strategy is centred around identifying exceptional growth companies in America and owning them for long enough that the advantages of their respective business models and the strength of their individual cultures become the dominant drivers of their stock prices. The aim of this strategy is to deliver significant outperformance for investors, and over the recent 5-years, it has consistently done just that.
Baillie Gifford has employed this strategy since the launch of their fund in 1997. This fund has consistently delivered exceptional performance. Over the past 1, 3 & 5-years the fund has been the number one fund in the North American sector with exceptional growth returns of 102.54% for the year and 348.97% for the past 5 years.
Baillie Gifford Long Term Global Growth
The Baillie Gifford Long Term Global Growth (LTGG) strategy is a purely stock-driven, unconstrained global equity strategy focused on investing in what the funds manager believes to be exceptional growth companies from around the world. The funds managers take on a long term commitment when stock picking because they believe that investing in companies with the scope to grow to multiples of their current size over the next decade has the potential to transform the returns achieved for investors over time.
Although the fund has a long-term growth strategy, in the 3 and half years since it launched it has grown in size to manage more than £4 billion of client money and it has ranked the number one fund in its sector for growth since its inception. Over the past 12 months the fund has returned growth of 97.65% compared to the sector average of 7.68^ and over 3-years it has managed to deliver growth of 139.19%. Although the fund is relatively young it has established itself at the front of its sector and one that competitors must strive to come close to.
The fund is one of 4 Baillie Gifford managed funds on our list that are classified within the competitive IA Global sector where over the past 12 months their growth returns ranked 1st, 2nd, 3rd and 4th out of 330 funds which highlights Baillie Gifford's expertise in global equity markets.
Baillie Gifford Positive Change
Similar to the Baillie Gifford Long Term Global Growth fund, the Positive Change fund is classified within the IA Global sector. The fund is a relatively new fund having been launched in January 2017 but in its short history it has attracted significant inflows from investors and the fund currently manages just over £1.7billion.
The fund has an ethical theme and the managers use the United Nations Sustainable Development Goals to help identify and measure the contribution that individual companies are making to solving global challenges before selecting the companies to invest in. Since the fund’s inception it has excelled and continually performed above the sector average. Over the past 1 & 3 years the fund has returned growth of 70.15% and 113.86%.
Baillie Gifford Global Stewardship
The Global Stewardship fund is a sustainable growth fund with the aim of generating excellent long-term returns by investing in companies aligned with the needs of a successful, sustainable society. For this fund, Baillie Gifford actively seeks transformative companies creating innovative solutions and allocating capital to those that can generate scale in these new products and processes. The fund counts Shopify, Amazon and Tesla among its top holdings and in the past 1 and 3 years it has managed to deliver growth of 63.78% and 85.94%.
Baillie Gifford Global Discovery
Renowned for the quality of its in-house research, Baillie Gifford brought its smaller companies’ teams together in 2011 to form the global discovery team. This fund consists of what the team believes to be the most innovative and fast-growing smaller companies in the world. It has a strong growth bias and is aggressive in nature. Performance wise, the fund has continually excelled and over the past 1, 3 & 5 years it has outperformed 99% of competing funds within its sector with growth returns of 60.94%, 100.41% and 204.10%.
Morgan Stanley US Growth
The Morgan Stanley US Growth fund is one of the largest in the North American sector where it manages £6 billion of client money. The fund competes alongside the Baillie Gifford American fund where it has been its closest competitor. The funds manager has invested heavily in technology companies with its largest holding in video meeting app Zoom, which experienced exponential growth this year as remote working increased as a result of the covid19 pandemic.
In 2020 the fund ranked 2nd to the Baillie Gifford American fund for growth as it returned 87.80%. Over 3& 5 years it had the same ranking as it returned growth of 142.21% and 301.76%.
Matthews China Small Companies
The Matthews China Small Companies fund is a Chinese equity fund that is classified within the compact IA China / Greater china sector. Over the past 1, 3 & 5 years the fund has topped the sectors for growth with returns of 60.85% , 80.36% and 209.61%. However, it is important to note that the funds leading managers have all departed the fund at the end of August this year with new managers now in place. Such a significant change to the funds core management team could potentially impact on the funds future strategy and performance.
Morgan Stanley US Advantage
The US Advantage Fund’s aim is to grow the investment of its clients over 3 – 5 year timeframe.The Fund invests at least 80% of its assets in securities issued by US companies and as a result it is classified in the IA North America sector where it returned growth of 58.21% and 104.75% over the past 1 & 3 years which was better than 97% of its competitors.
Polar Capital Global Technology
The Polar Capital Global Technology fund has consistently been one of the top growth funds in its sector. The fund has a global approach to technology investment across large, medium and smaller companies and holds between 70-90 stocks, approximately 35-75% are from America, 15-45% from Europe and 5-40% from Asia, with the funds largest holdings being Facebook, Apple, Alibaba and Microsoft. The fund has been a renowned long-term top performer and the recent 12 months have been no exception. Over the past year this fund has managed to return growth of 54.64%, which was higher than any other fund in the IA Technology & Telecommunications sector.
BNY Mellon Oriental
The BNY Mellon Oriental fund is not a widely recognised fund but it is one that has consistently performed well. Classified within the IA Asia Pacific ex Japan sector the fund invests primarily in technology and consumer services companies across Asia with Samsung and Alibaba its two largest holdings. As a relatively unknown fund, it currently only manages just over £136 million of client assets but despite its small size it has continually delivered exceptional returns. Over the past 1, 3 & 5 years this fund has returned growth of 46.60%, 45.56% and 122.78% respectively.
Maximising Growth & Recovery
By Investing In Proven Quality Each of the 10 funds featured have consistently been among the top performers in their sectors and in recent weeks as markets tumbled, they withstood the fall much better than the majority of their peers with losses well below their sector average.
Their strong performance when markets have been both stable and highly volatile reaffirms the view that they are well placed to maximise growth and recovery when markets stability returns in the aftermath of the coronavirus pandemic.
The full list of 100 funds features a diverse range of funds from different sectors, fund management brands and with different investment objectives. Although these funds have been among the top performers this year for growth, how they perform going forward is not guaranteed. However, our research shows that the funds with a consistent history of outperformance are more likely to continue to outperform compared to the funds and fund managers who have a more chequered performance history.
