Technology funds continued to leave the rest of the global market behind in May, according to data put together by Fairview Investing.
Tech funds rose by an aggregate 16% in May, as the artificial intelligence (AI) and semiconductor trade showed no signs of losing steam. This was the second month in a row which saw tech funds deliver more than a 15% gain.
Asia ex-Japan was the fund sector that made the best attempt at keeping up with tech funds, delivering an aggregated monthly return of 10.4%. This was in large part owing to the region’s role in the AI boom. Emerging markets and Japan also fared well in their own right.
The full top five:
| Fund Sectors – One month (top five) | Return % |
| Technology & Technology Innovation | 16.02 |
| Asia Pacific Excluding Japan | 10.43 |
| Global Emerging Markets | 9.43 |
| Asia Pacific Including Japan | 7.91 |
| Japan | 6.54 |
On the opposite end of the spectrum, the Latin America sector was the worst performer as the continent continued to battle economic stagnation.
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Infrastructure funds also struggled to generate a meaningful return in May. The fact that only one sector lost money, while money market funds were among the worst performers, points to how strong the current bull market is despite continuing trouble in the Middle East.
| Fund Sectors – One month (bottom five) | Return % |
| Latin America | -2.57 |
| Infrastructure | 0.24 |
| Short Term Money Market | 0.27 |
| Standard Money Market | 0.34 |
| Global Inflation Linked Bond | 0.76 |
“Investors showed little sign of following the adage, ‘Sell in May and go away’ last month as global equity markets continued to rally, brushing aside the economic fallout from the stalemate in the conflict between the US and Iran,” said Ben Yearsley, director at Fairview Investing.
“Volatility remained elevated as the fragile ceasefire held for most of the month. Although missile exchanges briefly resumed towards the end of May, the month ended on hopes that both sides were close to agreeing a 60-day extension to the ceasefire leading to a reopening of the Strait of Hormuz.
“Pretty much all sectors produced positive returns in May; the outlier was the IA Latin America sector which fell by 2.6%, with a strengthening dollar and falling energy prices particularly weighing on Brazil, and some profit taking after a strong rally year-to-date,” Yearsley continued.
“Keir Starmer’s position as Prime Minister appears increasingly precarious, with Andy Burnham now widely seen as the frontrunner to succeed him. If Burnham wins the Makerfield by-election on 18th June a leadership challenge appears likely over the summer.
“More important from a global investment perspective, was the meeting between Presidents Trump and Xi of China during the middle of the month. Whilst the meeting didn’t see any major deals announced it did provide some hopes of more stable ties between the two superpowers.”
