April’s top and bottom performing funds

A round up of the notable fund sector trends in April.

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  1. Rob Morgan

In the first four months of 2019, global equity markets have recovered a significant amount of the losses seen at the end of last year. In fact, the US S&P 500 and the Dow Jones Industrial Average hit new all-time highs in the latter part of April. This followed a change in tone from central banks, particularly the US Federal Reserve, which allayed concerns that interest rates would be increased too aggressively.

The stalemate over Brexit remained unresolved with the European Union and the UK agreeing to delay Brexit for six more months, unless a solution can be found sooner. The now-familiar uncertainty had little impact on the pound and the UK stock market. Indeed, it was a further positive month for shares at home as well as overseas with a number of smaller companies and growth-orientated funds performing particularly well.

The political and economic backdrop means that Europe, alongside the UK, is now one of the most out of favour investment areas. Across the Investment Association sectors covering the region, the second half of last year saw total outflows of £1.575bn. Part of the issue is concerns over trade. If President Trump reaches a deal with China, he may then turn his attention to auto tariffs which could affect European auto manufacturers. The US President has taken to Twitter to accuse the EU of taking advantage of the US over trade for years. Now it seems the value emerging is starting to pique interest. European funds were among the top performers during the month.

US and Chinese officials continue trade talks with the aim of having agreed a deal ahead of a planned meeting between Presidents Trump and Xi. There still isn’t an exact date for the meeting, but speculation is that it will be in June. US and Chinese shares have both been strong in the expectation that the deal will be a positive one. The talks are likely to feature prominently in market sentiment in the weeks ahead. Meanwhile, China's GDP growth beat expectations in the first quarter. The world's second largest economy expanded by 6.4% in the January to March period, faster than the 6.3% expected by economists, and fuelling the optimism of equity investors.

The technology sector, once again, was one of the main beneficiaries of renewed investor enthusiasm, albeit all equity sectors produced gains, with the US notably strong across many sectors. Facebook’s figures were well received, while Microsoft’s valuation broke the $1 trillion barrier for the first time as investors cheered a 14% increase in sales in the fourth quarter. The technology-heavy NASDAQ joined other US indices in recording an all-time high.

Traditional safe haven areas were among the worst performing, including gilts – UK government bonds – and gold. Government bonds and other low risk, interest rate-sensitive areas had previously notched strong gains from the decreasing likelihood of interest rate rises. The gold price, meanwhile, hit its lowest level in 2019 on the positive outlook for the US dollar, and Indian equities were volatile amid the ongoing general election.

Although investors should be aware past performance is not a reliable indicator of future results, here are the top and bottom ten Investment Association (IA) funds and sectors for April 2019 in full:

Top 10 funds:

Bottom 10 funds:

Top 10 sectors:

Bottom 10 sectors:

Past performance is not a reliable indicator of future returns. Figures are shown on a % total return basis, bid to bid price with net income reinvested; Source: FE Analytics, data for April 2019: 31/03/2019 to 30/04/2019. Onshore and retail open-ended funds only.

Past performance is not a reliable guide to future returns. This website is not personal advice based on your circumstances. No news or research item is a personal recommendation to deal. Investment decisions in fund and other collective investments should only be made after reading the Key Investor Information Document or Key Information Document, Supplementary Information Document and Prospectus. If you are unsure of the suitability of your investment please seek professional advice.

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