Data from Morningstar also found that funds that invested in UK stocks ranked among the worst-performers © FT/Montage

Equity funds that invest in the fossil fuel industry ranked as the worst-performers of 2020, with energy products from Brookfield, BlackRock, Goldman Sachs and Vanguard losing at least 30 per cent after the oil price floundered during the coronavirus pandemic.

Saudi Arabia’s oil price war in March followed by a dramatic decline in demand for fossil fuels as countries locked down in response to Covid-19 left many energy funds reeling.

The $1bn Center Coast Brookfield Midstream, a US product, was the worst-performing actively managed equity fund globally last year, down almost 36 per cent. BlackRock’s BGF World Energy, which is based in Europe, lost almost 35 per cent, according to figures compiled by Morningstar, the data provider.

The Goldman Sachs MLP Energy Infrastructure fund and Vanguard’s $4bn Energy fund were both down about 31 per cent.

The Morningstar data, which look at actively managed equity funds with at least $1bn in assets, also found that funds that invested in UK stocks ranked among the worst-performers.

Ryan Hughes, head of active portfolios at AJ Bell, a UK investment platform, said there were “Covid winners and Covid losers” in 2020.

“Areas such as technology and green energy were judged as beneficiaries of Covid as we all adjusted our way of living and therefore performed very strongly in the spring and summer while more traditional areas such as oil, financials, travel and leisure were all seen as the big losers of Covid and got hit hard before staging a late year-end rally,” he said.

He said funds that invested in UK stocks were particularly hard hit because the country’s market is dominated by companies in sectors such as oil and travel, which performed badly.

Worst-performing active equity funds of 2020*
FundAsset managerDomicileReturn 2020-01-01 to 2020-12-31 Base Currency
Center Coast Brookfield Midstream Foc YBrookfieldUS-35.8
BGF World Energy A2 EURBlackRockLuxembourg-34.6
Goldman Sachs MLP Energy Infras InstlGoldman SachsUS-31.0
Vanguard Energy InvVanguardUS-30.8
Tortoise MLP & Pipeline InstlTortoise Capital AdvisorsUS-29.5
Invesco SteelPath MLP Select 40 YInvescoUS-25.2
Invesco UK Eq High Inc UK IncInvescoUK-22.1
Invesco SteelPath MLP Income YInvescoUK-21.7
Invesco UK Equity Inc UK IncInvescoUK-21.5
Jupiter Income TrustJupiterUK-18.6
Mercer Pasv Glb REITS UCITSCCFA130.3000€Mercer Global InvestmentsIreland-18.2
JOHCM UK Dynamic B AccJ O HambroUK-18.1
Ninety One GSF Latin Amer Eq A Acc USDNinety OneLuxembourg-17.8
Schroder Income Maximiser A AccSchrodersUK-17.6
Penser Yield AFCGSweden-17.1
Krungsri LTF Dividend StockBank of AyudhyaThailand-16.9
Schroder Income AccSchrodersUK-16.3
JPM Europe Strategic Value A (dist) EURJPMorganLuxembourg-16.1
AQR Diversified Risk Premia A USDAQRLuxembourg-16.0
Man GLG Undervalued Assets Profl Acc CMan GroupUK-16.0
Source: Morningstar *assets of at least $1bn

Invesco had the largest number of worst-performing funds on the list, with two energy funds and two UK funds down by at least a quarter. This includes two products previously run by Mark Barnett, a former protégée of disgraced fund manager Neil Woodford. Mr Barnett left Invesco in May and was replaced by new managers.

Invesco said that although the 2020 annual returns for Invesco UK Equity Income fund and Invesco UK Equity High Income fund “were disappointing, changes implemented by the new managers have already at this early stage had a favourable effect, and subsequent performance from the two UK equity income funds has been very encouraging”.

Goldman said its energy fund had been hit by the coronavirus sell-off, but added that performance was up significantly since news of the Covid-19 vaccine emerged and it now ranks among the top performers this year.

Vanguard said: “Investors should expect various equity sectors to lag or outperform the market, particularly over shorter periods of time.”

Brookfield and BlackRock declined to comment.

The best-performing equity funds featured several products investing in energy transition and technology. This included the BNP Paribas Energy Transition, which returned 164 per cent last year.

Ulrik Fugmann, co-manager of the fund, said the “performance was predominantly driven by stock selection and a tilt towards ‘value’ implemented in the latter half of 2020 that has continued to bolster performance into 2021”.

The best-performing actively managed equity fund in 2020 was the Ark Genomic Revolution, which returned 180 per cent. The product is an actively managed exchange traded fund, a fast-growing type of fund structure where unlike in traditional ETFs, investment professionals make decisions on portfolio allocation.

Several other actively managed ETFs from Ark also appear in the top 20, including products investing in renewable energy and technology. Ark declined to comment.

Top performing active equity funds of 2020
FundAsset managerDomicileReturn 2020-01-01 to 2020-12-31 Base Currency
Ark Genomic Revolution ETFArk FinancialUS180.5
BNP Paribas Energy Transition C DBNP ParibasLuxembourg164.6
Ark Next Generation Internet ETFArk FinancialUS157.1
Ark Innovation ETFArk FinancialUS152.5
Baron Partners RetailBaronUS148.5
American Beacon ARK Transfmt Innov R5American BeaconUS148.0
Nikko AM ARK Disruptive Innovation A USDNikko AMLuxembourg147.6
Morgan Stanley Inst Discovery IMorgan StanleyUS142.6
GF High-End Manufacturing Eq AGF Fund ManagementChina133.8
Baillie Gifford American B IncBaillie GiffordUK121.8
Virtus Zevenbergen Innovative Gr Stk AVirtusUS119.1
BGF Next Generation Technology Z2 USDBlackRockLuxembourg117.8
MS INVF US Growth IMorgan StanleyLuxembourg117.1
Morgan Stanley Insight IMorgan StanleyUS116.6
Morgan Stanley Inst Growth IMorgan StanleyUS115.6
Transamerica Capital Growth ATransamericaUS111.6
Ark Fintech Innovation ETFArk FinancialUS107.9
Ark Autonomous Technology&Robotics ETFArk FinancialUS106.7
Handelsbanken Hållbar Energi A1 SEKHandelsbankenSweden103.9
Baillie Gifford WW L/T Glb Gr B USD AccBaillie GiffordIreland101.0
Source: Morningstar *assets of at least $1bn

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