No fund groups are dominating 2021 in quite the same way Baillie Gifford did last year, Trustnet research shows, although there are a handful with plenty of their funds at the top of their sectors. 
Last year proved to be an exceptional one for Edinburgh-based investment house Baillie Gifford, as its funds handed its investors some of 2020’s strongest returns
The group is a well-known follower of the quality-growth style, which was boosted by the coronavirus pandemic and the accompanying stimulus efforts. In addition, the move to working and shopping from home benefitted tech stocks, which are a common feature in the firm’s portfolios.
As has been noted many times before, Baillie Gifford American made the highest return of the entire Investment Association universe in 2020, gaining 121.84 per cent. But this wasn’t the only fund in the group’s line-up to dominate.
FE fundinfo data shows that 17 of the firm’s 30 funds that are in a sector where decile rankings are appropriate (or 56.7 per cent) were in the top decile in 2020 while another four (or 13.3 per cent) were in the second decile.
The group didn’t have a single fund in the bottom decile of their peer group.
Source: FE Analytics
So, are any groups in with a chance of mirroring Baillie Gifford’s success in 2021?
We ran to the numbers to see which fund houses had the greatest proportion of their ranges in the top two deciles of the peer group over 2021 to 16 June. Only groups with 10 or more funds in sectors where decile rankings are appropriate were considered.
One thing is clear: Baillie Gifford hasn’t been able to dominate the opening half of 2021.
Our data shows the firm only had one of its funds, or 3.3 per cent of its total, in the top decile and none in the second. That one first-decile fund is Baillie Gifford Pacific, which is up 9.74 per cent over the period in question.
Some 40 per cent of its range – or 12 funds – are in the bottom decile with another four in the ninth, meaning 53.3 per cent of Baillie Gifford’s funds are in the worst two deciles over 2021 so far.
The reasons behind this are clear. The announcement of effective coronavirus vaccines brought the promise of an eventual end to widespread lockdowns and social distancing. This is in turn allowed investors to anticipate a period of strong economic growth and higher inflation.
As growth stocks tend to underperform in these conditions, value stocks – which had been overlooked for an extended period – took over market leadership and rallied hard. This meant that many of the successful funds of the recent past fell from the top of the performance tables while those that had struggled previously rose to the top.
The below table shows which fund groups have the biggest proportion of their products in the top two deciles.
Source: FE Analytics. Data between 1 Jan 2021 and 16 Jun 2021
Muzinich & Co sits at the top of the table with half of its eligible funds in the first or second deciles over 2021 so far.
The firm is a specialist in fixed income investing and many of its outperforming strategies concentrate on emerging market debt or high yield bonds. These areas have come back into favour this year, as the ‘re-opening trade’ made investors more interested in cyclical assets (or those that do well when the economy is looking strong).
Among the firm’s top decile funds over 2021 are Muzinich Emerging Market Corporate Debt, Muzinich Emerging Markets Short Duration and Muzinich Global Short Duration Investment Grade.
In second place is Artemis Fund Managers, which might be a more familiar name to UK-based investors. The firm’s investment philosophy sees its managers only buy an asset if they believe it is undervalued, which explains the strong performance during this value rally.
Just under half of its funds are in the top two deciles of their respective Investment Association sector this year. Artemis Global Income, Artemis UK Special Situations and Artemis High Income are some of its top-decile funds at the moment.
Schroders, one of the bigger names in the UK fund management industry, comes in third place with 45.5 per cent of funds in the first or second decile.
The group has funds that employ a wide range of styles and approaches, but it should come as little surprise that its more value-orientated offerings – such as Schroder Recovery, Schroder Income and Schroder MM Diversity – are in the top decile over the year so far.
Other well-known investment houses with more than 30 per cent of their fund ranges in the top two deciles include Barclays, M&G UK, Jupiter, Invesco, Premier Miton Investors and JP Morgan Asset Management.