Without a doubt, 2020 has been a historical year, marked by a ‘before’ and an ‘after’ in our society, caused by the COVID-19 pandemic. Aside from the pandemic itself, the unprecedented measures taken by central banks, in addition to the the contested US elections, and the on-going trade war have continued to cause movement in markets, resulting in winners and losers. Here we take a look at the funds that gained the most throughout 2020.
Which funds have been delivered the highest returns in 2020?
|LU0823414809||BNP Paribas Funds Energy Transition||Sector Equity Ecology||135,85%*|
|LU0266117687||Morgan Stanley Investment Funds Growth||Other Equity||116,57%*|
|IE00BF0D7Y67||Baillie Gifford US Equity Growth Fund||US Large Cap. Growth Equity||106,11%*|
|LU1917165158||BGF Next Generation Technology Fund||Other Equity||103,66%*|
|LU2043819098||Allianz Global Artificial Intelligence AT||Other Equity||94,78%*|
*Data obtained from Morningstar as of December 15, 2020
BNP Paribas Funds Energy Transition
Companies in area of energy transition are benefiting from supportive structural trends such as technological advances, regulatory developments and the growth of renewables as part of the energy mix.
With a fund size of over 1.5 billion, fund managers Ulrik Fugmann and Edward Lees look to invest in 40-60 European, Asian and US companies that are driving change across three core themes:
“We expect the strong growth opportunities that we have seen recently to remain for the foreseeable future as companies that offer environmental solutions to accelerate the energy transition are encouraged by the pace of regulatory change and the increasing profitability of renewables. Areas offering such opportunities include green hydrogen and fuel cells, both of which have been recent beneficiaries of environmental policies by the European Union and China.“Edward Lees, co-manager of BNP Paribas Energy Transition fund
Morgan Stanley Investment Funds Growth
The Counterpoint Global team’s investment philosophy based on long-term, high-conviction portfolios can result in periods of deviation in terms of performance against the benchmark and other comparable funds.
“In 2020, the fund is ahead of the benchmark due to favorable stock selection and sector allocation (at 10/30/20). However, the team continues to focus on stock selection and the long-term outlook for the portfolio companies.
The IT sector was the largest contributor to portfolio returns for the year, primarily due to favorable stock selection. Consumer discretionary, health care, industrials and communication services also contributed positively due to stock selection.”Morgan Stanley Counterpoint Global team
The Counterpoint Global team seeks out unique companies whose market value they believe can significantly increase for key reasons. They try to find these companies through fundamental analysis, focusing on the companies’ secular growth. That is why, for the team, short-term market events are not as significant in their stock selection process. Their goal is to maintain a portfolio of high quality companies that they believe are well positioned in the long term, regardless of the market environment, and by analyzing the companies over a five-year time horizon.
Baillie Gifford US Equity Growth Fund
Several underlying trends accelerated in response to Covid-19 during 2020. The virtualisation of daily life provided a jump forward in demand for our existing holdings. Zoom was a little known conferencing tool that has been catapulted into everyone’s consciousness. The online medical service Teladoc has seen demand multiply. Sales have surged at online retailers Amazon and Wayfair and their share prices responded.
“We search out exceptional American growth companies and we hold them in the fund for several years – because most of the wealth created by stock markets over history is concentrated in a small number of outstanding businesses. Most investors focus too much on the news and too little on the coming decades. The average investor on the NYSE holds stocks for less than a year before selling. But companies don’t succeed in months, and shareholders who lack patience miss the multiples of return that the best businesses generate. Tobi Lutke, the founder of the ecommerce platform Shopify notes: “it took 10 years to become an overnight success.”Fraser Thomson, US Equity Strategy Specialist at Baillie Gifford
BGF Next Generation Technology Fund
During 2020 we have seen how the technology sector has been one of the least affected by the COVID crisis. In fact, working from home has meant the disruption of new companies and the increased use of technological solutions for everyday life.
“Unlike a technology fund with generic exposure to the sector, BGF Next Generation Technology invests in the most advanced technologies, with companies that are destined to be potential market leaders of tomorrow. The management team focuses on an investment-friendly universe of 7 areas: Artificial Intelligence, Cloud Computing, 5G, the Internet of Things, Electric Vehicles, Robotics, and Fintech. As it has no benchmark index, it has no sector and geographic exposure restrictions and is characterized by a bias towards small and mid-cap stocks. In fact, the top 100 companies with the largest capitalization within the technology sector are excluded from the portfolio, to ensure direct and diversified exposure to the most innovative topics.”Andre Themudo, Head of Wealth at BlackRock Iberia
As for the outlook for 2021, we are optimistic that the market and economy will recover thanks to the advances in the vaccine. This pro-risk position means that we can expect revaluations in the equity market, being selective in sectors.
With respect to the technology sector, we believe that it is one of the sectors that has changed most structurally in recent years, and continues to offer new opportunities with technologies that are born and evolve every day. Being invested in these cutting-edge and disruptive technologies through GDB Next Generation Technology makes it an attractive long-term investment position.Andre Themudo, Head of Wealth at BlackRock Iberia
Allianz Global Artificial Intelligence AT
Artificial intelligence is in full development and its deployment to all kinds of businesses, sectors and activities is just beginning. Zoom’s own founder, Eric Yuan, went from not being on the Bloomberg list of the world’s 500 richest people to ranking 184th in March, as soon as much of the world went into seclusion. The speed of change, and its irreversibility, is characteristic of our time.
In this environment, the Allianz Global Artificial Intelligence fund has once again achieved great results. In its retail CT class in euros, it obtained a return of 79.80%, with data up to December 14. Since its launch in 2017, its annualized return is 28.25% .
“We are still in an incipient phase. Artificial intelligence is in full development and its deployment to all kinds of businesses, sectors and activities is just beginning. The companies that are able to take advantage of this potential will not only be able to grow, but they can become the leaders in their sector, generating a disruptive effect on entire industries, something from which their shareholders will benefit in the long term. The key is to be selective and to know how to identify the winners in time in a changing and dynamic environment”Sebastian Thomas, Manager of Allianz Global Artificial Intelligence fund