Best and worst-performing sectors and funds in August 2018

Posted by Adrian Lowcock in Press releases category on 01 Sep 18

  • American Smaller Companies is best-performing sector in August
  • European fund is best performer in August
  • Emerging Market Bonds lead worst-performing sectors as Turkey weighs
American equities posted another strong month in August as investors worried about the combined effects of a strong US dollar and deepening trade war on riskier assets looked to protect their wealth by investing in the relatively safer US market.  In addition, the US market’s valuation has been supported by two strong quarters of earnings growth prompted by Trump’s tax cuts boosting corporate profits.  

Technology also returned to the top flight in August, although Elon Musk’s antics highlighted how valuations mean that some tech companies are extremely sensitive to news flow. As such, the sector is likely to remain volatile. 

US and technology funds account for seven out of the top 10 funds in August. However, the top- performing fund by some way was the Fidelity Pan European Fund, which invests in European large caps with a UK bias. It performed particularly well in the last few days of August. 

Top 10 best-performing sectors

Investment Association Sector Percentage return
North American Smaller Companies 6.90
Technology & Telecommunications 4.80
North America 4.37
Global 1.75
Property 0.96
Japan 0.77
Global Equity Income 0.73
European Smaller Companies 0.61
Japanese Smaller Companies 0.41
Sterling High Yield 0.34
*Source FE Analytics, performance from 31st July to 31st August 2018 in sterling on a total return basis

Top 10 best-performing funds

FUnds Percentage return
Fidelity Pan European in GB 28.49
LF Miton US Smaller Companies in GB 14.27
Artemis US Smaller Companies in GB 12.46
Baillie Gifford American TR in GB** 11.25
Morgan Stanley US Growth in GB** 10.62
JPM US Smaller Companies in GB 10.58
Baillie Gifford Global Discovery TR in GB** 10.45
AXA Framlington Global Technology in GB 9.24
Polar Capital Global Technology in GB 9.05
Neptune Global Smaller Companies in GB 8.74
*Source FE Analytics, 31st July to 31st August 2018 in sterling on a total return basis

China continues to lag for UK investors, although it dropped to second in the list of worst- performing sectors in August, behind Global Emerging Market Bonds.  That sector suffered as a crisis unfolded in Turkey, raising investors’ concerns that the country is just the canary in the coal mine and that they should reduce their risk exposure because the strong US dollar could cause havoc in emerging markets. 

Having rebounded strongly in July, Brazilian and Latin American stocks fell because of their strong correlation to commodity prices which, all things being equal, are adversely affected by a strong US dollar. 

10 worst-performing sectors

Investment Association Sector Percentage Return
 Global Emerging Markets Bond  -3.68
 China/Greater China  -3.36
 Global Emerging Markets -2.85 
 Specialist  -1.57
 UK Equity Income  -1.50
 UK All Companies -1.27 
 UK Equity & Bond Income  -0.86
 Europe Including UK  -0.65
 UK Index Linked Gilts  -0.59
 Europe Excluding UK  -0.52
*Source FE Analytics, 31st July to 31st August 2018 in sterling on a total return basis

10 worst-performing funds

Funds Percentage Return
 GAM Star Discretionary FX  -13.88
 LF Ruffer Gold  -11.98
 BNY Mellon Brazil Equity  -11.96
 HSBC GIF Brazil Equity in GB  -11.70
 HC Charteris Gold & Precious Metals -11.58 
 JPM Brazil Equity  -11.44
 Quilter Investors Precious Metals Equity  -11.03
 BlackRock Gold & General  -10.88
 Investec Global Gold -10.72 
 Natixis H2O MultiReturns  -10.70
*Source FE Analytics, 31st July to 31st August 2018 in sterling on a total return basis