What's Hot? What's Not? East rising, West sinking

What’s Hot?

• Developed Asia (Japan and Korea) make up 6/10 funds in the Hot table this month.
• Two Japanese smaller companies funds (one of our Trades of the Decade) also feature.  
• Korea is becoming more popular as recent scandals recede in the rear-view mirror.  Companies starting to pay more dividends to investors also raises confidence.
• European growth has been reassuring investors despite rumbling Italian and Greek crises.  Three European funds make it into the table (and European smaller companies have been one of the best performers year-to-date).
• Global Technology puts in an appearance as investors keep the faith with the FANGS (Facebook, Amazon, Netflix and Google).  Amazon’s share price recently went through the $1000 per share barrier up from $749 at the start of the year.  

What’s Not?

• The UK has continued to sit under a Brexit cloud.  Uncertainty over the result of the upcoming General Election hasn’t helped.  Unsurprisingly, UK equity funds and index-linked gilts both sit in the bottom table.
• US smaller companies have continued struggling as controversy continues to weigh on investors’ faith in Trump’s ability to gain support for his controversial agenda.  Investors don’t like inconsistency or uncertainty
• Biotech and Natural Resources also feature.  Biotech has continued to suffer.  A large US exposure coupled with uncertainty over US healthcare reform haven’t helped…
• …while Russia and energy funds wobble in line with the oil price.  OPEC (the oil cartel) failed to live up to investors’ hopes of deeper production cuts.  
• Longer-term, increasing efficiency and rapid development of alternative energy sources and electric vehicles could mean the oil industry’s predictions of future oil demand may prove ambitious…
• India makes up the last of the Not Hot table.  One of our Trades of the Decade, periods of weakness are a good opportunity to add to holdings.

FURTHER READING

• Can Trump crash the market?
• Happy Anniversary, India.  And many happy profits, too.
• Of robots, Trump and Macron

Table 1: What’s Hot?

Table 2: What’s Not?