16 December 2021 - 2021 has been another hard year for businesses and individuals, as we continue to battle the pandemic. But it’s been a positive year for many investors.
Out of the 57 sectors in the Investment Association universe, 41 have had positive returns and 17 are in the double digits.
Here, then, we take a look at the biggest sector winners and losers over another remarkable year.
The best performing sector is the newly launched IA India/Indian Subcontinent, where the average fund has returned a huge 26.7%*.
It’s followed by IA North America (25.1%*) and another new sector, IA Commodity/Natural Resources (22%*), which benefitted from rising gas and oil prices.
Indian equities started outperforming in the summer and have continued their steady gains, thanks to good growth, cheaper valuations and a gradual improvement in the Covid-19 situation.
“Last year was very strong for China and very weak for India, but this has reversed in 2021,” commented Darius McDermott, managing director of Chelsea Financial Services. “If you’d moved into China in 2020 and India this year then you’d have called it perfectly.”
Alquity Indian Subcontinent, which is on the Chelsea Selection was the top performing fund on the Aegon platform, with returns of 45.1%*.
TB Guinness Global Energy (43.53%*) and Guinness Global Money Managers (42.5%*) made up the rest of the top three.
At the other end of the table, the IA Latin America sector was by far the worst performing, with average losses of 12.7%*. It was followed by IA China/Greater China (-7.8%*) and IA Global Emerging Market Bonds Local Currency (-6.9%*).
“It’s been a rough year for investors in Latin America,” added Darius. “In fact, this sector is the only one to have negative returns over one, three and five years on an annualised basis.”
Brazil has endured one of the worst Covid experiences, and many other Latin American countries lacked the fiscal stimulus of developed markets.
“Latin America is a very high-risk area to invest in,” he said. “It’s always been super volatile and we prefer to have a global emerging market fund manager allocate to that region for us when they see really good opportunities.”
China has also had a difficult 2021 – a complete reversal of fortunes after having done so well in 2020.
Regulatory clampdowns on the big tech giants, the afterschool tutoring industry, property sector and bitcoin, have all spooked investors and the stock market has suffered as a consequence.
“A number of Chinese equity and emerging market managers we have spoken to recently believe that the Chinese market could have bottomed now,” said Darius. “If this is the case, 2022 could be far more prosperous for investors.”#
|Rank||Fund||Percentage return year to date*|
|1||Alquity Indian Subcontinent||45.12|
|2||TB Guinness Global Energy||43.53|
|3||Guinness Global Money Managers||42.50|
|4||Fiera Capital Europe Magna New Frontiers||39.57|
|5||T. Rowe Price Frontier Market Equity||38.90|
|7||VT De Lisle America||33.98|
|8||Brown Advisory US Sustainable Growth||33.53|
|9||L&G Global Technology Index Trust||33.30|
|10||Dodge & Cox US Stock||32.89|
|12||Stewart Investors Indian Subcontinent Sustainability||32.41|
|13||Liontrust GF European Strategic Equity||32.37|
|14||BlackRock Global Unconstrained Equity (UK)||31.66|
|15||ASI American Equity Enhanced Index||31.31|
|16||BMO North American Equity||31.26|
|17||UBS S&P 500 Index||31.08|
|18||Liontrust UK Micro Cap||30.76|
|19||BNY Mellon US Equity Income||30.47|
|20||JPM US Select Equity Plus||29.81|
*Source: FE fundinfo, total returns in sterling, 1 January 2021 to 16 December 2021
Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. Darius's views are his own and do not constitute financial advice.