The FTSE All Share index has made a cumulative return of only 14.35% since UK voters chose to leave the European Union in a referendum on 23 June 2016.
That is sluggish performance compared with other stock markets during the past 34 months — whether you blame the decision itself or the prolonged and continuing failure to agree and finalise a deal to exit.
In contrast the MSCI Europe ex-UK index has returned 40.51%, not far behind the S&P 500 (44.93%), which, despite the sharp fall in the fourth quarter of last year, has pulled most other equity markets higher on the strength of the US economy, high corporate earnings and low interest rates.
The FTSE All Share Index and other leading indices since Brexit referendum
Source: FE Analytics. Cumulative returns between 23 June 2016 and 8 April 2019 in US dollars.
But even the UK’s bellwether index has been robust compared with the sclerotic performance of the average actively-managed UK equities fund. The fund category has posted a cumulative return over the nearly three-year period of 5.34%.
The worst under-achievers include the SJP UK High Income Fund, managed by the once lauded Neil Woodford, and another income product — the Threadneedle UK Monthly Income Fund — which have both posted negative returns in their pursuit of solid, dividend paying stocks.
However, there have been a few managers who have bucked the drift towards mediocrity. The Merian UK Alpha Fund, managed by Richard Buxton, has achieved 33% cumulative return by taking big positions in large-cap leaders and out-sized exposure to the TMT sector.
The Schroder ISF UK Equity Fund and the Blackrock GF United Kingdom have also outperformed the index (which is their benchmark) partly through holdings in TMT stocks.
Perhaps significantly, the ongoing charges figure (OCF) for the Merian fund is a mere 0.97%. which is well below the OCF for the Schroder and Blackrock funds, and almost half of the sector median.
Comparative data of top 3 and bottom 3 UK funds since Brexit referendum
| Fund |
Cumulative return (%) since 23 June 2016 |
Annualised volatility (%) | Alpha | Sharpe Ratio |
OCF (%) |
| Merian UK Alpha |
32.99 |
12.33 | 9.28 | 0.84 |
0.97 |
| Schroder ISF UK Equity |
23.85 |
10.69 | 6.09 | 0.59 |
1.63 |
| Blackrock GF United Kingdom |
15.88 |
13.27 | 3.11 | 0.47 |
1.83 |
| Sector average |
5.34 |
11.94 | 0.00 | 0.24 |
1.81 |
| FTSE All Share |
14.35 |
12.26 | – | 0.49 |
– |
| SJP UK High Income |
-12.61 |
15.09 | -7.01 | -0.01 |
1.66 |
| Threadneedle UK Monthly Income |
-4.42 |
11.83 | -2.58 | 0.00 |
1.63 |
| Invesco UK Equity |
-2.54 |
13.96 | -1.69 | 0.09 |
2.71 |
