Woodford tops UK equity fund chart 3 months on from Brexit

Neil Woodford has topped the charts of the best performing UK equity funds since the EU referendum, according to data compiled by financial analysts Fund Calibre.

As Saturday marked three months since the Brexit vote, financial analysts Fund Calibre has published a list of the best performers since the UK voted to leave, with the Wooford Equity Income fund at the top of the table, following a run of uncharacteristic under performance.

In a statement released by the firm, it noted that in the immediate aftermath of Brexit, UK smaller companies took “quite a hit”, with the FTSE Smaller Companies (ex IT) index falling 10.3% in just two working days¹. The FTSE 100 fared slightly better, losing 5.62% in value¹.

However, despite all the negative headlines, the UK’s largest companies were back in positive territory in less than a week². The UK’s smaller companies took a little longer – just over a month in fact³ – but still surprised many with their resilience, Fund Calibre stated.

The best performing Elite rated UK equity fund in the three months since Brexit is Woodford Equity Income, run by the highly experienced Neil Woodford. It has returned 12.08%⁴.In second place is Evenlode Income (11.86%⁴) and in third place is R&M UK Equity Long Term Recovery. The FTSE All Share returned 8.06%⁴ over the same period.

The best performing Elite Rated UK Smaller Companies fund has been Liontrust UK Smaller Companies, which posted 10.34%⁴, followed by Marlborough UK Micro Cap Growth (9.17%⁴) and Marlborough Special Situations (7.36%⁴). All outperformed the FTSE Smaller Companies index, which returned 6.29%⁴.

Darius McDermott, managing director of FundCalibre, said: “The UK stock market has been remarkably resilient in the past few months, bolstered also by actions from the Bank of England to add support to the economy.

‘Easy money has been made’ 

“Many of the fund managers I speak to are starting to suggest the ‘easy money has been made’ out of the Brexit bounce and there is caution as the downside risks are yet to come through when we actually start the process of exiting the European Union.”

For this reason, McDermott believes that now is not the time to buy a market tracker fund. The recent surge, he says is making the indices “look expensive” and investors might risk buying precisely as markets return to “the cusp of renewed volatility”.

“Instead, I’d recommend a few carefully chosen active funds, whose managers will be looking to exploit this volatility, rather than simply being taken for the ride,” he added.

Best performing funds in the UK across the last 3 months:

Brexit: 3 months on

¹ Source: FE Analytics, total returns, 23/06/16 (closing prices) – 27/06/16
² Source FE Analytics, total returns 23/06/16 – 29/06/16
³ Source FE Analytics, total returns 23/06/16 – 27/07/16
⁴ Source: FE Analytics, total returns, 23/06/16 (closing prices) – 21/09/2016, UK All Companies, UK Equity income, UK Smaller Companies

ABOUT THE AUTHOR
Gary Robinson
Deputy Editor, International Investment and Head of Video at Open Door Media Publishing. A fully qualified journalist and filmmaker with more than 20 years' financial services experience, both as journalist and originally as an IFA.

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