The £1.8bn Old Mutual Mid Cap fund saw the biggest losses in the market volatility following the UK’s vote to leave the EU, losing 14 per cent.
The fund saw the heaviest losses in the two days of trading following the vote to Brexit, delivering a 14.04 per cent loss in the two days and a 13.78 per cent loss over the week.
The fund was one of many UK small and mid-cap funds to be hit in the days following the referendum. The Morningstar research looked at UK domiciled funds with more than £50m in assets, with around 90 per cent reporting their performance data.
On Friday the FTSE 250, which is seen as more domestically-focused, fell 7.2 per cent, its worst one-day drop since 1987, and fell another 7 per cent yesterday.
Of the 10 funds seeing the largest falls in performance, six were in Morningstar’s UK mid or small cap sectors, while three fall into the flex cap sector, which has more small and mid cap stocks.
The second worst performer was the £122.8m Premier Ethical fund, which delivered a 13.24 per cent loss over the two days. The fund has a UK mid-cap exposure and has 32.8 per cent of the fund in financials, which saw heavy losses after the referendum result.
The £550.5m Artemis UK Select fund, run by Ed Legget, delivered a 12.69 per cent loss, followed by the £1.1bn Schroder UK Mid 250, run by Andrew Brough, at a 12.59 per cent loss.
The Old Mutual Mid Cap fund, run by Richard Watts, has exposure to housebuilders, which saw massive market falls following the vote. The fund has 4.1 per cent in Barratt Developments and 3.1 per cent in Taylor Wimpey. It also has 20 per cent exposure to financials.
A statement from Old Mutual says: “We are long term investors and don’t look at an individual day, or indeed any short-term activity, in isolation, as this is not a reflection of the aims of the fund.
“At some point, the selling pressure we are currently experiencing will ease and the stocks impacting short-term performance will look very attractively valued given the share price falls seen over the last few days. We have a very strong UK equity team with a history of outperformance and will seek to capitalise on opportunities created in the recent market selloff.”
Those funds that saw the highest gains in the two-day period predominantly had exposure to gold and other perceived safe havens.
The £112.7m Investec Global Gold fund delivered the best returns, gaining 19.98 per cent over the two-day period, taking its returns over the month to 31.5 per cent.
The price of gold reached a two-year high on Friday, to $1,358 a troy ounce, before falling back to end the day at $1,328.
Among the other winners in the period was the £1.1bn BlackRock Gold and General fund, which returned 18.72 per cent, the £56.9m Smith and Williamson Global Gold and Resources fund and the £456.2m Henderson Global Care Growth fund.
The £52.6m Invesco Perpetual Japanese Small Companies fund was among the big gainers, returning 13.19 per cent in the two days.
Japanese stocks dropped on the Brexit vote, but the Nikkei 225 index has since rebounded. It fell 7.9 per cent on Friday, its biggest drop since the 2008 global financial crisis, but has since stabilised.
Jason Hollands, managing director at TilneyBestinvest, says the most popular fund choices among its investors were focused on UK equities.
“There continues to be a focus UK equity markets led by veteran active managers, most notably Neil Woodford’s Equity Income fund and Richard Colwell’s Threadneedle UK Equity income fund. There have also been a number of index tracker funds in the top purchases, suggesting clients wanted to capture what they perceived to be a dip in the market in the wake of the vote,” he says.