January’s top and bottom performing funds

Rob Morgan rounds up the notable fund sector trends in January as share markets picked up following an ugly December.

This content is more than 6 months old now, please visit the news area of this site for more recent content

  1. Rob Morgan

Stock markets started 2019 on a positive note with, unusually, all the Investment Association (IA) sector averages ending the month higher. A reversal of the hawkish stance of the US central bank helped global equities recover some of the losses sustained in the fourth quarter of 2018, and although economic growth is expected to slow in most regions this year, corporate earnings are still expected to grow in mid-single digits.

Recent news from China was more mixed with economic growth slowing to a modern-era low of 6.6% in 2018. There is much debate about how much the downtick is due to the trade dispute with the US and how much is simply because the nation is suffering a ‘debt hangover’ after a decade of extreme stimulus. At the World Economic Forum in Davos, the International Monetary Fund (IMF) cut its global growth forecasts for this year and next, it citing a bigger-than-expected slowdown in China, as well as signs of weakness in Europe.

There was at least some more positive noises about an agreement between the US and China, and this was enough to lift the market mood. High-level trade talks have begun in Washington between senior members of the Chinese and US governments ahead of the 1 March deadline for the introduction of new tariffs on Chinese imports.

Most share markets delivered strong returns, notably the US and Asia, although pre-election jitters overshadowed the Indian stock market. The rally was broad based with defensive and ‘value’ areas joining sectors more typically volatile areas such as technology and biotech.

In the UK there was improvement in market sentiment, especially towards more domestically-orientated firms. Mid-cap, or medium-sized, companies were notably strong, apparently as the prospect of a ‘no-deal’ Brexit appeared to diminish.

A workable solution to the Brexit puzzle still appears to be out of reach with the EU looking unlikely to budge on its current position of no further negotiation. Yet with MPs indicating a collective distaste for a sudden, potentially chaotic withdrawal from the EU the most disruptive of outcomes now seems unlikely. The political events also served to lift the pound a little, creating a headwind for the larger, overseas-earning companies.

Safe have areas were generally weak. Gold fell back as risk aversion among investors diminished while bonds lagged having seen a relatively strong finish to 2018.

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 January 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 January 2019: 31/12/2018 to 31/01/2019. Onshore and retail open-ended funds only.

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

More from author

  1. Rob Morgan

    Options for buying into a Japanese resurgence

    Fund Research - 1st Feb 2019 16:38pm

    Japan faces economic headwinds, but it could have one of the world’s most attractivel...

  2. Rob Morgan

    An emerging markets income option

    Fund Research - 1st Feb 2019 16:38pm

    This fund could produce a useful income for those looking to build a high-yielding po...

  3. Rob Morgan

    Four funds for investors turning cautious to consider

    Fund Research - 1st Feb 2019 16:38pm

    Investors have been spooked by recent market developments, but what are the options f...

Most read articles

  1. January’s top and bottom performing funds

    Options for buying into a Japanese resurgence

    Fund Research - 1st Feb 2019 16:38pm

    Japan faces economic headwinds, but it could have one of the world’s most attractivel...

  2. January’s top and bottom performing funds

    An emerging markets income option

    Fund Research - 1st Feb 2019 16:38pm

    This fund could produce a useful income for those looking to build a high-yielding po...

  3. January’s top and bottom performing funds

    Four funds for investors turning cautious to consider

    Fund Research - 1st Feb 2019 16:38pm

    Investors have been spooked by recent market developments, but what are the options f...

Investment involves risk. You may get back less than invested.