Monday 01 July 2024 11:25 am

UK investors see India and tech funds smash June as climate strategies falter

By: Elliot Gulliver-Needham

June saw India-focused funds for UK investors surge to the top of the pile following the country’s election, when tech funds continued their hot streak into the month.

The average Indian-focused fund grew over eight per cent in value over the month, while tech funds grew an average of 6.4 per cent, data from FE Analytics revealed.

Ben Yearsley, director of Fairview Investing, described the Indian bounce as “slightly surprising” given the initial market panic initially after the election.

“However, markets rebounded swiftly and decided India’s meteoric rise could continue. Fund managers who invest in India say the crucial aspect of the coalition is that it still has infrastructure spending as the key priority,” he said.

The next best performing sectors were Asia Pacific ex Japan which grew 4.1 per cent, North American growing 3.7 per cent, and Global Emerging Markets, with a bounce of 3.6 per cent.

The best performing fund throughout the UK in June was JP Morgan’s Emerging Europe fund, which grew 20.3 per cent.

However, the vehicle has lost 98.9 per cent over the last five years due to very high exposure to Russia during its invasion of Ukraine, so Yearsley said “the sharp rise is small comfort” for investors.

A similar story emerged for the second best performer, Aviva European property, which grew 13.1 per cent throughout the month but is still down 36 per cent over the last five years.

“The dead cat has to bounce a long way with some funds,” added Yearsley.

The third best performing fund was the FSSA Asia All Cap, which thankfully wasn’t just on the recovery. The fund skyrocketed 12.2 per cent throughout the months thanks to a 21 per cent Indian weight and a high stake in chip maker TSMC.

When examining the worst performers of the month, a clear trend emerges: Seven were climate or energy transition funds, while three focused on commodities.

The absolute worst performing fund of the month was Active Solar, which dropped 15.7 per cent in June, having fallen almost 40 per cent in the last year.

Meanwhile, the worst performing sector was Latin America, which lost an average of 5.8 per cent of their value throughout the month. This was followed by European Smaller Companies funds, which fell 3.7 per cent, and commodity-focused funds, which dropped 3.6 per cent.

The best performing investment trust of the month was the Gresham House Energy Storage fund, rising a whopping 27.8 per cent after announcing a battery leasing deal with Octopus.

This was followed by a host of tech trusts, including Augmentum Fintech, which rose 15.5 per cent off the back of its annual results.