An Indian summer for investments

Doncaster hosts the Cazoo St Leger Day this Saturday. The oldest of Britain’s five horse-racing Classics, and the last of the five to be run each year, the St Leger marks the end of the summer sporting social calendar… and the day some market timers reinvest.

Referring to a time when stock market traders spent the summer attending sporting events and therefore had their eyes off the investment ball, the adage suggests that investors should “Sell in May and go away, come back on St Leger Day”.

But anyone following the adage this year would likely be kicking themselves today because, unlike the weather, investments in the main sector have been shining: 49 out of 54 IA sectors have had positive returns during the summer.

Best performing sectors

The best performing sector was IA European Smaller Companies, where the average fund returned 11.43%*. IA UK Smaller Companies was second (up 10.87%*) and IA UK Index Linked Gilts was third with average returns of 10.52%*. IA Property Other was in fourth place (10.41%*) and IA Technology and Telecommunications in fifth (10.37%*).

The five sectors that had negative returns were IA China/Greater China (-6.28%*), IA Asia Pacific ex Japan (-0.94%*), IA EUR Corporate Bond (-0.53%*), IA EUR Mixed Bond (-0.09%*) and IA Short Term Money Market (-0.05%*).

Indian equity funds best overall

Fittingly, as we’ve been enjoying an Indian summer over the past few days, when you look a little closer at individual funds, Indian equity portfolios have performed best this summer.

16 of the top 20 performing funds were Indian equity portfolios including Elite Rated GS India Equity Portfolio and Stewart Investors Indian Subcontinent Sustainability which returned 24.71%* and 20.01%* respectively.

The Indian stock market is currently benefiting from continued domestic interest, given the increasing economic momentum. It remains one of the FundCalibre research team’s preferred long-term emerging market investments.

Chinese equities on the other hand have suffered due to increased regulation by the Chinese government in sectors such as education and technology. As a result, the other end of the summer performance table was dominated by portfolio investing in this market: 17 out of the 20 worst performers were Chinese equity funds.

Top 10 performing funds and trusts on FundCalibre this summer*:

RankFund/TrustPercentage returns over the summer*
1GS India Equity Portfolio24.71%
2Stewart Investors Indian Subcontinent Sustainability 20.01%
3FSSA Japan Focus19.35%
4Aberdeen Standard SICAV I Global Mid-Cap Equity 18.59%
5TR Property Investment Trust18.52%
6LF Montanaro UK Income18.27%
7European Opportunities Trust17.23%
8Jupiter European16.88%
9LF Montanaro Better World16.80%
10Jupiter European Smaller Companies16.52%

*Source: FE fundinfo, total returns in sterling, 1 May 2021 to 8 September 2021

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. Whilst FundCalibre provides product information, guidance and fund research we cannot know which of these products or funds, if any, are suitable for your particular circumstances and must leave that judgement to you. Before you make any investment decision, make sure you’re comfortable and fully understand the risks. Further information can be found on Elite Rated funds by simply clicking on the name highlighted in the article.