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The top performing investments of 2021 so far

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Investors who have backed areas of the market which have been “badly beaten up” by the pandemic have seen impressive returns in the first quarter of 2021.

That’s according to new analysis from AJ Bell, which has broken down the sectors, funds and trusts which have performed best so far this year.

Where should I have put my money?

Looking on a sector basis, the top performer to date has been the UK smaller companies, which has seen a 9% increase over the quarter.

That’s substantially better than North American smaller companies in second place at 6.9%, just edging out UK equity income at 6.9%.

By contrast, it’s been a horrible time for those putting their money in bonds and gilts. Worst of all is the global EM bonds local currency sector, which has shrunk 8.1%, followed by UK gilts at 7.4%.

The best funds and trusts

Of course, within those sectors there will be some investments that have performed brilliantly, and others that need improvement. 

Starting with funds, top of the tree is the Schroder ISF Global Energy, which has delivered an astonishing 25.2% growth over the quarter.

Here’s how the top funds shape up:

Fund Q1 Performance %
Schroder ISF Global Energy 25.2
M&G Japan Smaller Companies 22.9
VT De Lisle America 22.7
Guinness – Global Energy 20.5
Premier Miton UK Smaller Companies 20.4
Aberforth UK Small Companies 19.8
VT Cape Wrath Focus 19.3
TM RWC UK Equity Income 17.1
Barings Global Agriculture 17.1
Legg Mason IF ClearBridge US Equity 17.0

Source: FE Total return 31/12/2020 to 31/03/2021, sterling denominated funds only 

However, pick the right investment trust and you can enjoy even more impressive returns, as the table below demonstrates: 


Investment trust Q1 performance %
All Active Asset Capital Limited 184.9
Agronomics Limited 135.8
Drum – Income Plus Reit 73.6
Drum – Drum Plc 44.3
Tirupati Graphite PLC 43.9
Tiger Royalties And Investments PLC 42.9
Hammerson PLC 40.8
Seneca Growth Capital VCT PLC 39.6
New City Investment Managers – Geiger Counter 38.3
Miton UK MicroCap Trust PLC 37.1

Source: FE Total return 31/12/2020 to 31/03/2021

Investment trusts enjoyed an excellent 2020 too, delivering record payouts despite the pandemic

Don’t miss out on a “resurgent” market

Laith Khalaf, financial analyst at AJ Bell, noted that funds investing in commodities and even shopping centres were having a good quarter, while the US market was also doing well with the S&P having broken through the 4,000 ceiling for the first time.

He added: “UK equity funds also enjoyed a rare glimpse of the top of the performance tables, thanks in part to the cyclical make-up of the UK stock market, and the reassessment of the prospects for these economically sensitive stocks that has taken place since the arrival of effective vaccines.”

However, he noted that many investors are turning their back on the UK market. According to data from the Investment Association, as much as £1.7bn was withdrawn from UK equity funds in the first two months of the year. 

Khalaf continued: “These investors could find themselves missing out on a resurgent UK stock market, if the global economy performs as expected this year, as the banks and commodity stocks that play such a big part in the FTSE 100 should do well in an expansionary economic environment.”

This follows recent research which highlighted that the dividend tap is ‘being turned back on’ following the pandemic.

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