The UK stock market rallied hard immediately after the Conservatives won a much bigger majority than expected in the election but by far the best overall performer on the day was a portfolio that is being run by Neil Woodford (pictured). 
The general election on Thursday 12 December resulted in an 80-seat majority for Conservative party, giving prime minister Boris Johnson the mandate to ‘get Brexit done’. There had been concerns that the election would return another hung parliament or even a Labour government, but markets breathed a sigh of relief at the result on Friday.
The FTSE 250 made a total return of 3.44 per cent and the FTSE Small Cap was up 2.18 per cent; the FTSE 100 – where the high number of international earners would be hampered by the rallying pound – made 1.10 per cent.
Friday 13 December ended up being a very strong day for UK equity funds as a result, with the average IA UK All Companies member rising 2.74 per cent in the session. Returns were even better in IA UK Equity Income (up 2.96 per cent) and IA UK Smaller Companies (2.94 per cent).
Indeed, of the 500 best-performing funds from the 4,000-strong Investment Association universe, 228 were from the IA UK All Companies sector, 79 are in IA UK Equity Income and 47 were from IA UK Smaller Companies.
Source: FE Analytics
The table above shows the 25 best performers of the single day. While this is a very short time frame to look at performance, the dominance of UK equity strategies is clear.
Making the biggest one-day total return of the entire Investment Association universe is the £250.4m LF Woodford Income Focus fund with its 6.57 per cent gain. This fund has made the headlines in recent months, after manager Neil Woodford handed in his notice as his investment empire collapsed amid poor performance and heavy outflows.
Trading in LF Woodford Income Focus is currently suspended as Woodford serves out his last days on the portfolio and a new manager is looked for.
Like the flagship LF Woodford Equity Income fund, the performance of LF Woodford Income Focus has been disappointing in recent years – which the manager blamed on the market being too pessimistic about the health of the UK economy.
Adrian Lowcock, head of personal investing at Willis Owen, said: “If you think about Woodford’s view, he has been consistently saying that the UK is in a stronger place that most people think. The election result effectively allows the market to reflect that particular view, because up until that point it was discounting a lot of the areas he was investing in – UK housebuilders, for example.
“What’s more, the Income Focus fund doesn’t have any of the unlisted investments that derailed LF Woodford Equity Income. It could be seen as a purer play on the UK economy, so it’s not that surprising to see it have a good day – although maybe a bit surprising that it’s the best overall.”
As the table above shows, funds with a bias to domestically sensitive areas such as mid- and small-caps as well as those taking a more value approach to investing were among those rallying the hardest on the election result.