Moneyspider in the News
12/07/2007
Moneyspider research shows possible pitfalls of fashionable sectors
Professional Adviser
Wide-ranging differences in the performance of the best selling ISA funds from five years ago demonstrates the potential pitfalls of following fashionable sectors, according to private investor research group Moneyspider.com.
The group analysed the five biggest selling ISA's on FundsNetwork in June 2002 compared with those popular in June 2007. Fidelity Specials Situations was the most popular fund five years ago, and would have doubled investor returns on a £5,000 original stake producing a profit over five years of £5,370. However, the same group's American fund would have returned a profit of just £610 on the same original investment, disappointing those ISA buyers looking for a recovery in the fortunes of the post 9/11 US market.
Tony Ahearne, a consultant at Moneyspider.com said: "There is inevitably a herd instinct with investors, who have a tendency to follow the fashionable sectors of the day."
He added: 'Now, the really sexy story is with niche specialists - JP Morgan's Natural Resources fund, for example, has rewarded investors with a gain of £16,390 on a £5,000 investment, a stunning 327pc growth over 5 years. Schroders' UK Mid 250 has also done very well, and this is a sector which looks to be one to watch, as the indices have outperformed the FTSE 100 the past 12 months."
Of the five best sellers from 2002 Artemis' UK Smaller Companies was the most successful, and would have produced a profit of £6,820 on an initial £5,000 investment.
|
