UK equity sectors rebounded in March while Baillie Gifford’s funds struggled

The UK Equity Income sector, last year’s dog, came in second in terms of average performance, rising 4.81% – hot on the heels of the Global Equity Income sector’s performance of 5.1%.

The UK Smaller Companies sector was the third best performer during the month, with an average rise of 4.3%.

The closed-ended space also saw strong returns from UK investments, with the UK Equity Income sector topping the tables with a 7.52% increase, followed by UK All Companies and UK Equity & Bond Income.

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Ben Yearsley, director at Shore Financial Planning, said: “With many of the largest UK companies announcing a return to the dividend roster over the last month it isn’t really a surprise seeing renewed interest in the equity income sector.”

Two UK funds have also made it into the list of the ten best performing funds in March: RWC UK Value, up 9.27%, and Stonehage Fleming UK Equity Income, up 8.79%, signifying a rebound for value and income stocks.

Reversal of fortunes for Baillie Gifford

The top fund in the list was Sanlam US Dividend, a contrarian, dividend value fund run by head of US equities Adour Sarkissian, which rose 11.61%.

In total, five US funds made it into the best performers list in March, notably all of these being value-focused names, with the usual suspects such as Ballie Gifford’s growth-focused strategies absent.

In fact, Baillie Gifford’s American fund made it into the worst performers list with a return of -8.82%, along with two other Baillie Gifford funds.

Yearsley said: “It is slightly ironic, or maybe fortuitous timing that in the month Baillie Gifford’s James Anderson announced his planned retirement (for April 2022) that their funds had such a tough time.

“At the same time, the top of the performance tables was dominated by out of favour value and cyclically focused funds. An obvious reminder to have balance in portfolios and that one style doesn’t dominate in perpetuity.”

In terms of sectors, China was the worst performer, falling 4.56%, while emerging market bonds and Asia were also among the hardest hit areas of the market.

Apart from Baillie Gifford’s products, gold funds also fared badly in March, with WS Charteris Gold & Precious Metals, Jupiter Gold & Silver and MFM Junior Gold all down around 11%.