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Where your fund picks matter most

The wide gap between the best and worst performing funds means it is very important to be selective
February 8, 2021
  • The extremes of the pandemic have hugely widened the gap between the best and worst performing equity and bond funds
  • Where the biggest gaps are and why you should question your fund picks in these areas

Tragedies are often said to bring people together, but any crisis will inevitably set out some winners and losers. History tells us as much, from differing experiences of the pandemic to the social impact of the financial crash. As a 2015 Berkeley University of California paper – The rich got richer â€“ put it, the crisis appeared to have destroyed a huge amount of wealth but also had a distorting effect.

The same principles apply to your portfolio, and the pandemic has been a clear example of how extreme circumstances can amplify existing trends, creating large gains and losses on both sides. If some individual assets have rocketed ahead, from Tesla (US:TSLA) to Bitcoin and the more recent GameStop (US:GME) shenanigans, big moves in the last year have also left clear water between the best and worst performers of the funds world.

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