Almost 80% of the 3,200 Morningstar rated funds rose in May, a month that saw UK markets hit record highs. The worst performer fund was down 7% while the best-performing was up almost 10%. Nine out of the top 10 funds in May were UK equity strategies.
There was plenty going in UK politics and economics in May: UK prime minister Rishi Sunak announced a general election for July 4, inflation came down to 2.3%, and the country exited a technical recession.
Ben Yearsley, director at Fairview Investing, says: “Following on from April’s new FTSE high, May has continued the same trend. The UK market finally appears to be garnering attention. Takeovers and M&A are almost a daily occurrence now – some rebuffed liked BHP’s attempt at Anglo and the PE approach for Hargreaves Lansdown, and others go through.
“It’s fascinating though that UK small cap is also joining the party topping the performance charts in May – the rally is spreading. Despite this, the UK still looks cheap offering good yields and defensive characteristics – one of the only things missing is proper growth stocks.”
At the other end of the spectrum, Latin America had a disappointing month. These funds occupy four of the 10 bottom spots. However, equity categories for Africa and Middle East, US large-cap growth, Brazil, and Japan small/mid-cap that struggled the most.
Every month, we look at the performance of funds available to UK investors rated by Morningstar, tracking the best and worst returns among funds available for sale.
The Best Three Performers in May 2024
Invesco UK Smaller Companies Equity Fund (UK)
The actively managed Invesco UK Smaller Companies Equity Fund (UK) was up 9.32% in May, outperforming the average fund in the UK small-cap equity category, which rose 6.24%. The £457.7 million fund has gained 8.01% year to date, while the average fund in its category is up 10.77%. Over the past three years, the Invesco fund has dropped 5.67%, compared to the 4.75% loss for the category.
WS Amati UK Listed Smaller Companies Fund
In May, the actively managed WS Amati UK Listed Smaller Companies Fund rose 8.96%, while the average UK small-cap equity fund gained 6.24%. The £429.5 million fund has climbed 12.43% year to date, outperforming the average fund in its category, which rose 10.77%. Over the past three years, the Amati fund is down 8.99%, while the average fund in its category is down 4.75%.
SVS Dowgate Wealth UK New Economies Fund
The actively managed SVS Dowgate Wealth UK New Economies Fund was up 8.96% in May, outperforming the average fund in the UK flex-cap equity category, which rose 3.44%. The £15.2 million fund has gained 13.79% year to date, while the average fund in its category is up 8.03%. Over the past three years, the Evelyn Partners fund has climbed 0.50%, compared to the 2.40% gain for the category.
The Worst Three Performers in May 2024
Magna Umbrella Fund PLC - Magna MENA Fund
The actively managed Magna Umbrella Fund PLC - Magna MENA Fund was down 7.16% in May, falling further than the average fund in the Africa & Middle East equity category, which fell 5.98%. The £74.3 million fund has lost 0.21% year to date, while the average fund in its category is down 2.40%. Over the past three years, the Fiera Capital fund has climbed 18.60%, compared to the 10.67% gain for the category.
Morgan Stanley Funds (UK) - US Advantage Fund
The actively managed Morgan Stanley Funds (UK) - US Advantage Fund was down 7.10% in May, underperforming the average fund in the US large-cap-cap growth equity category, which rose 1.77%. The £68.2 million fund has lost 5.88% year to date, while the average fund in its category is up 9.33%. Over the past year, the Morgan Stanley fund has climbed 8.78%, compared to the 23.46% gain for the category.
HSBC Global Investment Funds - Brazil Equity
The actively managed HSBC Global Investment Funds - Brazil Equity was down 7.09% in May, falling further than the average fund in the Brazil equity category, which fell 5.20%. The £100.7 million fund has lost 18.27% year to date, while the average fund in its category is down 15.27%. Over the past three years, the HSBC fund has dropped 4.13%, compared to the 0.02% loss for the category.
This article was generated with the help of automation and reviewed by Morningstar editors.
