The tech sell-off brought more pain for Baillie Gifford, which saw its funds deliver some of the worst returns in April, while beleaguered UK stocks bounced back.
After a tumultuous first quarter, the Edinburgh manager’s funds continued their downward slide into Q2, accounting for four of the bottom 10 performers. They include the £2.8bn Long Term Global Growth strategy and sub-fund, as well as the £1.1bn Global Discovery fund.
The £3.6bn Baillie Gifford American fund, which was among the biggest losers in Q1, was the worst performer in its Oeic line-up in April and the second biggest loser in the Investment Association universe, down 18.6%.
See also: Baillie Gifford US Growth trust taps into crypto craze
Only the Nikko AM ARK Disruptive Innovation fund had a worse time, losing investors 23.8%. The £3.2bn fund, which is a mirror strategy of Cathie Wood’s flagship Ark ETF, has slumped over 40% so far this year, as its top holdings like Teladoc, Zoom and Coinbase have seen their shares pummelled.
Growth funds from Morgan Stanley and T Rowe Price rounded out April’s biggest laggards, including the latter’s $988m (£791m) Global Technology Equity Sicav.
|Funds – one month (bottom 10)||Return %|
|Nikko AM ARK Disruptive Innovation||-23.84|
|Baillie Gifford American||-18.57|
|Morgan Stanley Global Insight||-17.03|
|T Rowe Price Global Technology Equity||-16.68|
|Morgan Stanley US Advantage||-14.71|
|Baillie Gifford Long Term Global Growth||-14.34|
|Baillie Gifford Global Discovery||-14.28|
|LF Access Long Term Global Growth||-13.19|
|Morgan Stanley INVF US Growth||-13.19|
|T Rowe Price Global Technology Equity (Sicav)||-12.97|
Source: FE Fundinfo
UK bucks stockmarket slump
With inflation trending higher, mixed consumer confidence and the price of Brent crude levelling out at $107 per barrel, stockmarkets had a “dismal” run apart from the UK, said Fairview Investing director Ben Yearsley (pictured).
While the S&P 500 lost 8.7%, the FTSE 100 rose a “creditable” 0.76%, Yearsley noted, and the FTSE All Share was up 0.30%.
“The boring stodgy sectors led the FTSE with electricity and pharma doing especially well in April – the UK continues to benefit from being ‘tech lite’,” he said.
UK gilts have another tough month as inflation ticks up
Fixed income funds endured another brutal month as inflation hit decade highs in the UK and US. UK Index-Linked Gilts was the third worst fund sector (-5.3%), behind Technology & Technology Innovation (-7.2%) and Latin America (-7.1%).
The Federal Reserve and Bank of England are both expected to hike rates this week to rein in rampant inflation, which hit 8.5% and 7% in the US and UK in March, respectively.
“Both venerable institutions are playing catch up and both arguably aren’t really having any impact in inflation,” Yearsley said.
“Bond markets are doing the work of central bankers as yields have now risen to levels many didn’t expect to see without a true meltdown in equities.”