These are the funds and sectors which blossomed over the summer, plus those that lagged.
The UK experienced an Indian summer in September and investors with money in the India/Indian Subcontinent will be basking in glory as its three-month cumulative performance was recorded at 7.14%.
According to FE fundinfo, the sector was buoyed by robust economic growth, strength in the US Dollar and a resilient domestic market.
Further, the fund information and technology firm said Indian equities tend to work in the opposite way to Chinese equities, which suffered in the last quarter on the back of weakening economic growth.
Commodity/natural resources in the Investment Association sector came in second place, recording 4.79% in the three-month period. In third place was the USD High Yield Bond Sector delivering a 3.5% return as it “offered attractive income opportunities in a low-yield environment”.
Making up the remaining top five was the Global High Yield Bond sector (3.12%) and the EUR High Yield Bond sector (3.10%).
At the other end of the scale, sectors sensitive to interest rates suffered.
The infrastructure sector came last as it recorded a -5.09% downturn which FE fundinfo said could be due to uncertainties surrounding infrastructure investment and funding. It could also be impacted by potential delays in Government projects, supply chain disruptions and labour shortage.
UK Index Linked Gilts experienced a fall of -4.58% as it struggled amid rising interest rates which caused a decline in bond prices. As a result, investors turned to higher-yielding assets, impacting the demand for index-linked gilts.
Elsewhere, the European Smaller Companies sector (-3.70%), the Healthcare sector (-3.09%) and the Europe Excluding UK sector (-2.25%) also recorded the largest declines, with European equities down due to the Chinese and global manufacturing slowdown.
Best and worst performing funds
The HANetf Sprott Uranium Miners UCITS ETF Acc GBP fund, recorded a three-month cumulative performance of 47.31%.
This was closely followed by the iShares MSCI Turkey UCITS ETF GBP fund with a return of 38.26% while the HSBC MSCI Turkey NAV GBP fund had a return of 38.11%.
The rest of the top five was made up by the Investors in the WS Guinness Global Energy I Acc fund (19.20%) and the Schroder ISF Global Energy A Dis NAV GBP AV fund (18.18%).
Between July and September, investors in the following funds faced a tougher period.
The BlackRock LifePath 2025-2027 P fund saw a fall of -98.98%, followed by the HANetf Electric Vehicle Charging Infrastructure UCITS ETF Acc GBP fund which recorded a loss of -26.80%.
Meanwhile, the Invesco Solar Energy UCITS ETF Acc GBP fund came third from bottom with -23.95%.
The final two in the bottom five were the HAN Medical Cannabis and Wellness UCITS ETF USD fund (-23.03%) and the Luxembourg Selection Fund – Active Solar C USD fund (-22.04%).
The most researched funds
Vanguard’s LifeStrategy 60% Equity fund saw 17,955 searches made in the quarter and also had the most reports (13,064) run.
In second, Fundsmith’s Equity fund was searched 16,835 times with 12,956 reports run, which FE fundinfo said “reaffirmed its position as a highly sought-after investment choice”.
The Vanguard LifeStrategy 80% Equity fund came in third place with 14,883 searches and 11,046 reports.
It was followed by the Vanguard LifeStrategy 40% Equity fund (12,748 searches and 10,168 reports) and abrdn’s Asia Pacific Equity fund (10,403 searches and 9,466 reports).
Charles Younes, deputy chief investment officer, FE investments, said: “During the summer, the markets have finally embraced the higher-for-longer rhetoric on the back of sustained inflationary pressures. Unsurprisingly, sectors with the most interest rates sensitivity have suffered.
“Better than expected macro data, as well as OPEC decisions, have pushed oil price closed to $100. Cyclical equity sectors best benefitted from that trend. Despite the summer optimism, we remain cautious about the global outlook and won’t be surprised if the winners from this summer would be the losers this winter.”
