The best performing sector across all global investment markets in the first half of 2019 was US Smaller Companies.
The data from FEAnalytics, covering the six months to June 30, showed all sectors of the IA universe have delivered a positive return this year to date.
The North America Smaller Companies sector returned 21 per cent in six months, while the global technology and telecoms sector returned 20 per cent and the North America sector as a whole returned 18 per cent.
The US smaller companies sector is less reliant on exports, and more closely linked to the US domestic economy, and so less sensitive to the effects of a global trade dispute, such as that seen between the US and China.
Conversely the worst performing sector of all was UK Direct Property, which returned just 0.4 per cent. This sector has been blighted by uncertainty around the UK economy and the UK high street.
FTAdviser recently reported that funds in this sector have been increasing their allocation to cash, in anticipation of a downturn.
In most of those funds investors pay the asset management charge on 100 per cent of the capital they invest, even if less than that is invested in actual property, and the rest is held in cash.
Adrian Lowcock, head of personal investing at Willis Owen, said: "UK Direct property was the worst performing sector in July, having been the worst performer for 2019.
"Brexit continues to weigh on the UK property market whilst retail continues to struggle on the high street.
"The top 10 worst performing sectors are dominated by the more defensive assets with the exception of UK Smaller Companies which put in a small positive return.
"The UK smaller companies sectors is naturally more domestically focused so as the likelihood of a no-deal Brexit increased so have concerns that the UK will enter a recession shortly afterwards."
Top performing fund sectors to June 30, 2019 according to data from FE Analytics
Fund Sectors – Return %
North America Smaller Companies +21.74
Technology & Telecommunications +19.75
North America +18.46
Asia Pacific inc Japan +17.16
Europe inc UK +17.14
The bottom sectors in the six months to June 30:
Fund Sectors –Return %
UK Direct Property +0.46
Targeted Absolute Return +2.42
Global Bonds +5.46
Sterling Strategic Bonds +6.12
Mixed Investment 0.35% Shares +6.27
david.thorpe@ft.com
