HEAD-TO-HEAD: JOHCM versus Threadneedle

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Source: FE Fundinfo. Cumulative returns in US dollars.

Performance

“The UK has been unloved for the past five years, following the Brexit vote in 2016,” said McDermott. “Uncertainty is a dirty word in investing – and foreign investors have steered clear whilst the prolonged divorce from the EU took place.”

“However, news about a Brexit deal at the end of last year – coupled with a strong vaccine rollout – has finally given investors cause for optimism,” he said.

The JOHCM fund has generated a three-year cumulative return of 12.90% in US dollar terms, according to FE Fundinfo, which is less than the 19% return of its benchmark FTSE All Share index.

Much of the performance has been earned this year, with the fund up 20.5% year-to-date, after negative returns in 2020 and 2018, FE Fundinfo data shows. Unsurprising three-year annualised volatility is high, at 28.5%.

The Threadneedle fund has a worse three-year history. It has posted only a 9.93% cumulative return in US dollar terms over the period, according to FE Fundinfo, with annualised volatility of 26.78%.

Over five years, the strong returns in 2019 and 2017 were offset by weak performances in 2018 and 2016.

The change in investor sentiment towards UK equities since the end of 2020 “makes both of these funds interesting, but for completely different reasons,” said McDermott.

“The JOHCM fund has performed well during the past five years, which is good for a fund with a value bias at a time when growth has dominated markets,” he said.

As value investing has gained popularity this year, the fund has prospered more than Threadneedle product.

Discrete calendar year performance

Source: FE Fundinfo. Annual returns in US dollars. *31 Dec 2020 – 20 Aug 2021

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