Conservative Government best and worst for equities - Fidelity

Equity investors have enjoyed their best and worst annual returns under a Conservative Prime Minister, Fidelity research shows.

As the political parties gear up for a 6 May General Election, Fidelity's analysis of UK capital market returns found Winston Churchill's third term in the 1950s returned 19.66% for equity investors, while Neville Chamberlain's time in office at the end of the 1930s saw a fall of -11.47%.

Bond investors saw a similar pattern, enjoying the best and worst returns under Labour Prime Ministers, the firm says. They reached a high of 15.84% during the second and third terms of Ramsay MacDonald in the wake of the Wall Street crash and a low of -13.13% during Harold Wilson's second term in the 1970s.

However, overall the analysis shows there is little correlation between market returns and the party in power.

"The Conservatives have been marginally better for investors, Fidelity says. "Equity investors received positive cumulative returns after inflation in 10 Tory administrations. Bond investors saw positive real returns in eight Conservative terms.

"However, a Labour Government has been almost as equally favourable for equity investors. They received positive returns after inflation in five of the seven Labour terms since 1902. Bond investors saw positive returns in four terms.

"On the face of it, Liberal governments are not great news for investors although this may reflect the short tenure of Liberals in power during the early decades of the 20th century. Of their three terms in office, only one saw positive returns on equities and bonds - that of David Lloyd George's administration."