US small caps top performance charts in January

US small caps top performance charts in January

The best performing fund sector in January was the North American Smaller Companies, which returned just over 8 per cent in the month.

Most equity markets recorded gains in January, with the next best performing IA sector being the Property Other, which invests in alternative property assets.

It was also a strong month in performance terms for emerging markets, with the broader MSCI Emerging Markets index returning 7.15 per cent, and the IA China sector being the best performer among the emerging markets, returning 5.77 per cent.

US equities topped the equity performance charts with the S&P 500 recording a gain of 7.8 per cent in the month, while the FTSE 100 gained 3.6 per cent.

Ben Yearsley, a director at Shore Financial Planning, said: "I quite enjoyed 2018 as reality started to reassert itself in some areas.

"However after a torrid December, it isn’t that much of a surprise to see January more positive.

"It’s fair to say that comments from the Fed about tempering rate rises probably did the trick.

"Before these comments, three to four [US interest rates] hikes were anticipated in 2019; now that could be two or even less.

"More positive noises about US China trade talks helped as did some unity finally in the Conservative party on what Brexit should look like."

He said the strong performance of the Specialist Property sector was likely due to the fact that it was one of the areas of the market that had sold off most heavily in 2018.