Positive economic data in the third quarter of this year boosted the performance of riskier assets meaning UK smaller companies were the top performing fund sector, according to the latest FundWatch survey from F&C Investments.
The Investment Management Association's (IMA) UK Smaller Companies sector was the only one of the 36 IMA sectors to achieve double-digit returns during the third quarter of 2013, gaining 11.93 per cent. This compared to reasonably flat gains in absolute terms in the second quarter, returning 1.03 per cent.
"The IMA sector performances in the third quarter showed riskier assets benefited from positive economic numbers from the UK, Europe and Japan," said Rob Burdett, co-manager of multi-manager at F&C Investments. "Domestically-focused smaller companies were one of the beneficiaries of this, with IMA UK Smaller Companies topping the sector performance chart, and Gervais Williams' CF Miton UK Smaller Companies Fund (GB00B818N094) coming out as the top performing fund for the quarter. Coinciding with the IMA sector performances, we also started to see a change in investor sentiment with risk appetite increasing."
Read our interview with Gervais Williams
We include a number of UK Smaller Companies funds and investment trusts in our IC Top 100 Funds. These include Marlborough UK Micro Cap Growth (GB00B02TPH60) and Unicorn UK Income (GB00B00Z1S94) funds, and investment trusts such as Standard Life UK Smaller Companies Trust (SLS), BlackRock Smaller Companies Trust (BRSC), Henderson Smaller Companies Investment Trust (HSL) and Acorn Income Fund (AIF).
Performance of IC Top 100 Smaller Companies funds
| Fund | 1-year cumulative total return (%) | 3-year cumulative total return (%) | 5-year cumulative total return (%) | Ongoing charge (%) |
| Marlborough UK Micro Cap Growth | 39.23 | 84.25 | 271.81 | 1.54 |
| Unicorn UK Income B Inc | 46.74 | 88.29 | 283.54 | 1.59 |
Source: Morningstar
Performance data as at 25 November 2013
Performance of IC Top 100 Smaller Companies investment trusts
| Investment trust | 1-year cumulative share price return (%) | 3-year cumulative share price return (%) | 5-year cumulative share price return (%) | Ongoing charge (%) |
| BlackRock Smaller Companies | 57.11 | 98.09 | 504.87 | 0.99 |
| Henderson Smaller Companies | 52.35 | 103.79 | 504.30 | 1.09 |
| Standard Life UK Smaller Companies | 33.15 | 66.97 | 333.54 | 1.21 |
| Acorn Income Fund | 67.05 | 161.69 | 493.22 | 2.62 |
Source: Morningstar
Performance data as at 25 November 2013
F&C also reports that gains in the bond sectors over the third quarter were also strongest in the riskier parts of the asset class, with the IMA Sterling High Yield sector gaining 3.25 per cent.
From the three mixed asset sectors, the equity heavy IMA Mixed Investment 40 – 85% Shares sector gained the most during the quarter, returning 3.13 per cent.
