October saw a recovery in stock markets after a dismal September. Saltydog Investor looks at the top funds and markets last month.

 
In September, more than 97% of the funds that we analyse fell in value. The best, AXA Framlington Biotech, rose 4.5%, but the worst, abrdn UK Real Estate Share fund, fell 20.1%.

But last month there was a dramatic improvement. More than 70% of the funds rose and the best-performing fund, BlackRock BGF World Energy, made nearly 15%.
 
Here are the top 10.

Saltydog’s top 10 funds – October 2022

 

Fund name Investment Association sector Monthly % return October 2022
BlackRock BGF World Energy Commodities and Natural Resources 14.9
Schroder ISF Global Energy Global 14.3
TB Guinness Global Energy Commodities and Natural Resources 13.9
Schroder European Recovery Europe Excluding UK 9.2
Ninety One Global Special Situations Global 8.9
LF Brook Continental European Europe Excluding UK 8.7
Artemis SmartGARP European Equity Europe Excluding UK 8.7
L&G UK Mid Cap Index UK All Companies 7.2
Schroder UK Mid 250 UK All Companies 7.2
FTF Martin Currie UK Mid Cap UK All Companies 7.2

Data source: Morningstar

 

The top three invest mainly in the large multinational oil companies which, as I explained last week, have benefitted from the rising oil price.

It is hard to be optimistic when there is so much depressing financial news in the media. Global economies have been struggling for some time and it looks as though UK GDP fell in the last quarter. According to the Office for National Statistics (ONS), GDP rose by 0.1% in July, but they estimate a fall of 0.3% in August. Later this week the ONS is expected to announce another decline for September.

Inflation is running at more than 10%, and last week the Bank of England raised the Bank rate by 0.75 percentage points to 3%.

The Bank of England also warned that the UK is facing its longest recession since records began, with the economic downturn expected to extend well into 2024.

However, stock markets do not always reflect what is actually happening in the economy, and are often an indication of where they think things will be in the future. If they believe that central banks are going to get inflation under control, then this could prompt the end of the economic decline and beginning of a recovery.

Our latest look at the monthly performance of some of the major stock market indices also shows an improvement in October. There were a couple that fell – the Shanghai Composite dropped 4.3% and the Hong Kong Hang Seng lost 14.7%, but all the others made gains. The previous month only one market rose.
 

Stock market indices 2022

 

Index Jan, Feb, March April, May, June July Aug Sept  Oct 1 to 4 Nov Year-to-date
FTSE 100 1.8% -4.6% 3.5% -1.9% -5.4% 2.9% 3.4% -0.7%
FTSE 250 -9.9% -11.8% 8.0% -5.5% -9.9% 4.2% 2.5% -21.9%
Dow Jones Ind Ave -4.6% -11.3% 6.7% -4.1% -8.8% 14.0% -1.0% -10.8%
S&P 500 -4.9% -16.4% 9.1% -4.2% -9.3% 8.0% -2.6% -20.9%
NASDAQ -9.1% -22.4% 12.3% -4.6% -10.5% 3.9% -4.7% -33.0%
DAX -9.3% -11.3% 5.5% -4.8% -5.6% 9.4% 1.6% -15.3%
CAC40 -6.9% -11.1% 8.9% -5.0% -5.9% 8.8% 2.4% -10.3%
Nikkei 225 -3.4% -5.1% 5.3% 1.0% -7.7% 6.4% -1.4% -5.5%
Hang Seng -6.0% -0.6% -7.8% -1.0% -13.7% -14.7% 10.0% -30.9%
Shanghai Composite -10.6% 4.5% -4.3% -1.6% -5.6% -4.3% 6.1% -15.6%
Sensex 0.5% -9.5% 8.6% 3.4% -3.5% 5.8% 0.3% 4.6%
Ibovespa 14.5% -17.9% 4.7% 6.2% 0.5% 5.5% 1.8% 12.7%

Data source: Morningstar

 
Nearly all these indices are still down over the year and one slightly better month does not mean that all our troubles are over. However, it does provide a glimmer of hope. If stock markets have assumed the worst, and that is already reflected in stock prices, then any good news could push markets higher.
 
For more information about Saltydog, or to take the two-month free trial, go to www.saltydoginvestor.com
 



Commentary » Latest » Mutual funds Commentary » Mutual funds Latest



Leave a Reply