Technology and smaller companies worst affected as stock markets take a battering
All but one of the 21 Autif equity fund sectors saw negative returns in 2001 on the back of bearish global stock markets.
According to figures from Lipper, the biggest fall was seen by the Technology & Telecoms sector which fell 39.37%, offer to bid, while the European Smaller Companies sector came down 30.93% and Japan some 26.71%.
The best performing of the 21 Autif equity sectors was the single fund Index Bear sector, populated by the Govett US Bear fund which saw gains of 19.67%.
Of the more populous sectors, the best performer was the 10 fund-strong Latin America sector, which saw growth of 0.67%, followed by Far East ex Japan which fell by 1.89% during 2001. The Global Emerging Markets sector was the fourth best equity performer, returning 2.54%.
Brian Harvey, research manager at Lipper, said: 'It is no great surprise to see that the Technology & Telecoms sector had its worst year ever.
'The much heralded burst of the dot.com bubble in early 2000 plus the more recent global economic downturn pushed sentiment in high tech stocks to new lows in 2001.
'The drop in fortunes in the telecoms market has also affected European smaller companies funds which also saw their worst year ever.'
Harvey added that there is unlikely to be an upturn for UK equity fund returns early in 2002 despite a relatively promising economic outlook for the region.
He said: 'We are told that the UK economy is, relative to other major economies, in good shape.
'Despite unemployment worries and the industrial sector recording the worst annual output data for 10 years, retail sales remain strong, the Bank of England base rate is low, inflation is at its lowest rate since 1963 and the UK is likely to record the strongest growth from the G7 countries.
'Equity fund investors who hold tight during volatile periods often reap the longer term rewards.'
UK Smaller Companies also fared badly as a sector during 2001, posting a fall of 19.32% while the UK All Companies sector saw returns of -13.58%.
Other smaller companies sectors also suffered. The average Japanese Smaller Companies fund fell by 18.19% while US smaller companies funds plunged by an average of 13.4%.
All the managed sectors also fell during the course of the year with Active Managed funds down 13.81%, Balanced Managed down 11.1% and Cautious Managed down 4.01%.
One of the few sectors delivering positive returns last year was Property which saw growth of 1.36%.
The four Autif bond sectors also produced positive returns during 2001 with the Global Bond sector delivering a 10.97% return in the 12 months to the end of 2001.
The UK Corporate Bond sector managed 4.76% while the UK Gilt sector posted a 1.5% return. The UK Other Bond sector saw returns of 0.26% in the 12 months to the end of 2001.
The results come at the same time as a survey from intermediary group Baronsworth Investment Services, which shows that several corporate bond funds are offering running yields of 9%-10%.
For example, the Aberdeen High Yield Bond fund is offering a running yield of 10.01% and a gross redemption yield of 9.5% while Axa Sun Life Global High Income has a running yield of 9.3% and a gross redemption yield of 9.8%.
Invesco Perpetual's European High Yield fund is offering a running yield of 10.62% and a gross redemption yield of 13.14% while the group's Monthly Income Plus fund is offering a running yield of 11.12% and a gross redemption yield of 11.48%.
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