The first quarter of 2019 saw a lurch back into positive territory for all sectors following a torrid final quarter in 2018.
The initial nervous response in Q4 to a change in tone from the US Federal Reserve changed to euphoria in Q1 2019, with the central bank taking a more cautious stance to withdrawing the punch bowl from the party. A lack of aggressive trade talk headlines also helped buoy the mood.
The IA China/Greater China was the best-performing sector, gaining 14.7%, with the IA Technology & Telecoms sector next best, rising 14.1%. On the flipside the IA Short Term Money Market sector was the laggard, returning 0.1%, with the IA Standard Money Market sector the next worst, gaining 0.2%.
The IA UK All Companies sector was the strongest performer of the UK equity sectors, gaining 8.9%, with the IA UK Equity Income sector next best, gaining 8.7%. The IA UK Smaller Companies sector was at the back of the pack, rising 7.1%.
The IA UK Index Linked Gilt sector led in the UK bond space, rising a staggering 6% in Q1, with the IA £ High Yield next best, gaining 5.1%. The IA £ Corporate Bond sector gained 3.9% in comparison. The IA £ Strategic sector was the worst of the UK bond sectors but still achieved a very respectable 3.6%. The IA Global Bond sector underperformed all of the UK-centric bond sectors, gaining 1.8% in the quarter.
The IA Targeted Absolute Return sector gained 1.6% in the quarter. Over the 12 months to the end of Q1, the sector lost 0.4%.
Looking at the Mixed Asset IA sectors, the exposure to equity dictated the ranking of the sectors, with the IA Mixed Investment 40-85% Shares sector leading the pack, rising 6.5%. The IA Mixed Investment 20-60% Shares sector was the next best, gaining 5.1%, with the IA Mixed Investment 0-35% Shares sector the laggard, rising 3.8%.
The IA Global Equity sector rose 9.6% against a rise of 8.1% for the IA Global Equity Income sector.
Piecing the last two rather volatile quarters together, the best place to have your money invested, would have been the IA UK Index Linked Gilt sector, which gained 8.2%. For reference, the IA China/Greater China sector returned 3.4% and the IA Standard Money Market sector a whopping 0.34%. You lost 6% in the IA North American sector, despite a 10.9% return here in Q1. Asset allocation has been “interesting” in recent times, to say the least.