Thursday 01 May 2025 4:42 pm
Oil prices fell significantly in April, hitting energy investment funds.
Energy funds suffered deeply during April as an expected slowdown in global growth caused oil prices to tank throughout the month.
Five energy funds featured in the bottom 10 performing investment funds, alongside two resource funds, with Guinness Global Energy as the worst performer, falling 13.5 per cent.
“With the price of a barrel of Brent dropping like a stone in April, energy shares took a pounding,” said Ben Yearsley, director of Fairview Investing.
Elsewhere near the bottom of the tables for April, US-focused funds had a tough time, with North American Smaller Companies and the main North America sector falling five and four per cent respectively.
However, Chinese funds were actually the worst performing across the entire month, dropping an average of 7.5 per cent throughout the month after US president Donald Trump imposed 145 per cent tariffs on the country.
In contrast, property funds performed strongly in April, making up four of the top ten funds, as the fall in global growth expectations caused markets to predict central banks would slash rates quicker than previously thought.
The European Central Bank cut interest rates at its last meeting, while the Bank of England is widely expected to make a 0.25 per cent cut to rates next week.
“Europe’s cut alongside the strength in German bunds would have been the key factors with three European property funds in the top ten,” said Yearsley.
Similar results came across investment trust sectors for April, with property securities trusts growing an average of 7.7 per cent, followed by UK property trusts at five per cent.
It was also a good month for European bond funds, driven by the sharp fall in yields for German bunds, as well as Latin American funds, which benefited from a sharp decline in the US dollar.
“Those who panicked and sold out early in April may well have seen losses in many asset classes but in most cases, with the clear exception of China, losses were largely erased by the month end,” added Yearsley
Top performing funds Return (per cent) Morgan Stanley INVF US Growth +9.35 VT Lyndon +9.29 Abrdn European Real Estate +7.69 CT UK Monthly Income +6.56 Downing European Unconstrained Income +6.46
https://www.cityam.com/investment-funds-in-april-energy-plummets-while-property-soars/
