If we look at the performance of the sector over a 12-month period, performance has suffered with UK equity markets dropping significantly over the past year, as a result of the credit crunch.
This drop is clearly reflected in our data, with a sector average loss of 27.60 per cent over the year to 19 May 2009, posted by Financial Express Analytics. This is 1 per cent greater than the 26.24 per cent loss made by the FTSE 100 index over the same period, which further justifies the reduced popularity of the sector as a whole over the past year.
IMA All Companies sector versus FTSE 100 – 1 yr
Source: Financial Express Analytics
According to data on Trustnet, none of the funds in the sector have managed to post a positive return over the last 12 months with the best performing fund – Analyst UK - only returning -9.3 per cent over the year to 19 May 2009.
Top ten IMA All Companies funds – 1yr
| Fund | % 1-yr |
| Analyst UK | -9.3 |
| Investec UK Special Situations A Acc | -9.5 |
| Schroder Recovery Inc | -10.5 |
| Schroder Specialist Val UK Equity X | -12.5 |
| Royal London UK Strategic Gth A Acc | -13.1 |
| Majedie UK Focus A | -13.4 |
| Majedie UK Equity B | -15.2 |
| Skandia IM UK Strategic Best Ideas Acc | -15.4 |
| Cazenove UK Dynamic B | -16.2 |
Source: Trustnet.com
The bottom ten funds - which includes three run by New Star and one by the firm that has acquired New Star, Henderson - have all recorded returns of less than -40 per cent over the last year.
Bottom ten IMA All Companies funds – 1 yr
| Fund | % 1-yr |
| New Star UK Alpha Ret GBP | -40.0 |
| New Star UK Growth Ret | -41.3 |
| Henderson UK Opportunities A | -41.4 |
| MFM W.H. Ireland UK Growth A | -41.6 |
| Saracen Growth A Acc | -42.5 |
| Majedie Special Situations A Acc | -42.9 |
| Premier Castlefield UK Alpha Ret Acc | -46.4 |
| Gartmore UK Focus Ret Acc | -47.7 |
| Rathbone Special Situations Inc | -52.8 |
| New Star Hidden Value A GBP | -58.4 |
Source: Trustnet.com
However, if we look at take a snapshot of the sector over the last six months then a very different story emerges.
Both the IMA UK All Companies sector and the FTSE 100 have benefited from the recovery of equities in recent weeks, with both indices adding around 15 per cent from lows of more than -40 per cent at the start of March 2009.
According to Financial Express Analytics, a snapshot of the IMA sector over the last six months shows a sector average gain of 14.11 per cent. This is 5 per cent greater than the 8.32 per cent gain made by the FTSE 100 over the same period.
IMA All Companies sector versus FTSE 100 – 6 mths
Source: Financial Express Analytics
The recovery in equities is also reflected dramatically in the performance of funds in the sector over the last six months with the top two performers – SVM UK Opportunities and Standard Life UK Equity Unconstrained funds – generating returns higher than 50 per cent during this period.
The top-50 funds all achieved returns higher than 20 per cent and – according to data on Trustnet - only four of the 332 funds have generated negative returns over the last six months.
Top ten IMA All Companies funds – 6 mths
| Fund | % 6-mths |
| SVM UK Opportunities A | 51.5 |
| Stan Life Inv UK Equity Unconstrained Ret | 50.8 |
| Majedie UK Opportunities A | 43.3 |
| Stan Life Inv UK Equity High Alpha Ret Acc | 36.3 |
| Schroder UK Alpha Plus Acc | 36.3 |
| Aviva Inv UK Special Situations 1 | 32.8 |
| Lazard UK Omega Ret Inc | 32.0 |
| Majedie Special Situations A Acc | 30.9 |
| Schroder Recovery Inc | 29.8 |
| Schroder UK Mid 250 Inc | 29.6 |
Bottom ten IMA All Companies fund – 6 mths
| Fund | % 6-mths |
| New Star Hidden Value A GBP | -12.8 |
| Rathbone Special Situations Inc | -4.6 |
| Thornhill Colquhoun Becher | -1.5 |
| CF Eclectica UK Relative Momentum A GBP | -1.4 |
| L&G UK Special Situations Ret Acc | 0.6 |
| Analyst UK | 0.9 |
| Thornhill Bryter Layter | 1.1 |
| L&G Equity E Acc | 1.4 |
| New Star UK Strategic Capital Acc | 1.5 |
| Thornhill Arcadia | 1.7 |
Given the sphere of activity by funds seeking to search for capital gains, the majority tend to invest in small to medium sized companies, given their scope for growth.
This includes the top performing fund over the last six months - SVM UK Opportunities - which aims to achieve long-term capital growth from a UK equity portfolio comprising of the fund manager Neil Vetch’s 'best ideas' within the UK mid and small cap universe.
The fund has benefited from maintaining its extremely high UK equities exposure in recent months. At the end of April 98.6 per cent of the fund was exposed to UK equities – and the figure was over 99 per cent the previous month - with the remaining 1.4 per cent exposure to money markets.
SVM UK Opportunities largest holdings 30th April 2009
| Holding | % |
| Pace Plc | 6.3 |
| Healthcare Locums Plc | 5.0 |
| Afren | 4.1 |
| Firstgroup | 3.8 |
| Aquarius Platinum Limited | 3.7 |
| International Power | 3.6 |
| Invensys Plc | 3.4 |
| Melrose | 3.3 |
| Valliant Petroleum Plc |
3.3 |
| C&C Group | 3.1 |
SVM UK Opportunities sector weightings 30th April 2009
| Sector | % |
| Industrials | 26.6 |
| Oil & Gas | 16.7 |
| Consumer Goods | 14.5 |
| Basic Materials | 11.3 |
| Consumer Services | 9.7 |
| Technology | 5.8 |
| Financial | 5.3 |
| Health Care | 5.0 |
| Utilities | 3.6 |
| Money Market | 1.4 |
| Others | 0.1 |