Surging interest in artificial intelligence (AI) saw the Technology & Technology Innovation sector become the top-performing sector in the first half of 2023, according to data from FE FundInfo.
The average fund in the tech universe returned 24.83% in the six months to 30 June, ahead of Latin America in second, which was up 11.87% over the same period.
North America (8.32%), Europe ex-UK (7.85%), and Europe inc. UK (7.44%) were also among the top-five highest performers.
Top performing sectors H1 2023
| 2023 | 2022 | ||
|---|---|---|---|
| Top five performing sectors (1 Jan – 30 June 2023) | Performance (1 Jan – 30 June 2023) | Top five performing sectors (1 Jan – 30 June 2022) | Performance (1 Jan – 30 June 2022) |
| Technology & Technology Innovation | 24.83% | Commodity/Natural Resources | 6.81% |
| Latin America | 11.87% | UK Direct Property | 5.33% |
| North America | 8.32% | Latin America | 4.79% |
| Europe Excluding UK | 7.85% | Infrastructure | 2.88% |
| Europe Including UK | 7.44% | USD Government Bond | 1.67% |
AI dominates IA Global Equity sector
Funds with exposure to the AI revolution dominated the IA Global Equity sector over the period, with the L&G Artificial Intelligence fund returning 36.25%.
This time last year, energy-focused funds topped the sector with Schroder ISF Global Energy returning 33.49%.
Charles Younes, head of manager selection at FE Investments, said: “Throughout the first half of 2023, the top-performing funds we have seen have consistently demonstrated their expertise in their respective investment categories.
“These funds have delivered impressive returns, showcasing their strong performance, robust strategies, and ability to generate substantial growth for our investors. We remain committed to providing exceptional investment opportunities and delivering value to our clients.
He added: “When looking at the best performing sectors, it shows that equity markets have been more robust than expected, while the sell-off in bond markets have continued despite expectations for the economy to collapse.”
In an improved year for the IA Sterling Strategic Bond sector, Capital Group Global High Income Opportunities was the top performer at 4.34%.
This compares to FP Carmignac Unconstrained Global Bond, which was the only fund in the sector with positive returns in the first half of last year at 0.42%.
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Meanwhile, the Artisan Emerging Markets fund returned 14.03%, just ahead of Robeco Emerging Stars Equities (13.88%) in the IA Global Emerging Markets universe.
FE praised both strategies “disciplined approach” to EM investing, helping them to achieve top returns in the sector.
In the UK All Companies universe, three funds achieved double-digit returns, with Liontrust UK Focus leading the way on 12.86%. Artemis UK Select (11.24%), and Ninety One UK Special Situations (10.12%) made up the top three.
