Technology funds topped the performance charts in September, while commodity-related funds saw a huge reversal in fortunes, according to Ben Yearsley, director at Fairview Investing.
Seven of the top 10 performing funds had a tech, innovation or related thematic flavour, with the Polar Global Technology fund leading the way with a return of 9.59%, according to FE fundinfo data.
On the flip side, versus August in which nine of the 10 best performing funds were commodity-related, in September seven precious metals funds appeared in the bottom 10.
Amati Strategic Metals went from gaining almost 30% in August to losing 12.36% in September, while August’s top performing fund Baker Steel Gold & Precious Metals followed its 35.95% rise with an 11.46% fall.
“What a difference a month makes,” Yearsley said. “August belonged to the gold bugs, September most definitely didn’t.”
The sector tables told much the same story, with the IA Technology & Technology Innovation sector topping the rankings with a 4.56% gain. This was followed by the IA Japan sector, where the average return was 2.63%, and IA Latin America where funds saw a 1.97% gain.
See also: Fairview’s Yearsley: Gold returns to form as investors climb the wall of worry in August
“Perhaps September’s biggest lesson was simply not to extrapolate August into September,” said Yearsley. “Precious metals went from heroes to zeroes while technology returned to the top of the charts.
“Markets have a habit of making last month’s winning trade look obvious just before reminding investors why diversification exists.”
Overall, Yearsley said equities remain “remarkably” resilient, and that perhaps AI really is powerful enough to conquer high interest rates, war and government debt.
“Or perhaps equity investors simply haven’t opened the bond market memo yet,” he added. “Either way, with a UK Budget looming, Iran still unresolved and central banks rediscovering their inner hawk, October doesn’t exactly look like a month for putting your feet up.”
