Which Stocks Have Driven UK Equity Fund Returns?

UK equity funds have outperformed the benchmark this year - which companies have contributed to these returns?

Samuel Meakin 9 July, 2018 | 9:03AM
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Tesco is one of the stocks in Schroder Recovery

The average fund in the UK Flex-Cap Equity Morningstar category has outperformed the FTSE All-Share index in 2018 so far. When looking for the factors driving this, one might first consider the market-cap effect – after all, over recent years, an allocation to medium and smaller companies has generally provided a healthy tailwind to many funds in the category.

However, the FTSE 250 index is only marginally ahead of the FTSE All-Share in 2018 to the end of May, and the FTSE Small Cap is behind. Looking stylistically, we can find funds that have outperformed on both the growth and value side. Of the funds in the category rated positively by Morningstar fund analysts, two examples might be Schroder Recovery, which follows a deep value approach, and Royal London Sustainable Leaders, which seeks to identify the best long-term growth prospects that also show ESG leadership or deliver a net benefit to society.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Alphabet Inc A2,430.20 USD0.00Rating
Amazon.com Inc3,346.83 USD0.00Rating
Microsoft Corp257.89 USD0.00Rating
Morrison (Wm) Supermarkets PLC175.75 GBP0.00Rating
Royal London Sustainable Leaders C Acc273.91 GBP0.74Rating
Sainsbury (J) PLC252.30 GBP0.00Rating
Schroder Recovery Z Acc1.24 GBP0.00Rating
Tesco PLC231.60 GBP0.00Rating

About Author

Samuel Meakin  is a fund analyst for Morningstar

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