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Top 10 investment company sectors over H1 2020

6 July 2020

Technology & Media powers through lockdown.

Technology & Media was the top-performing investment company sector over the first half of 2020, new data from the Association of Investment Companies (AIC) can reveal. The sector which invests in technology businesses whose services have been a lifeline through lockdowns around the world generated an impressive return of 29%.

Hedge Funds came second, benefitting from the market volatility of the past few months to return 27%. Completing the top three is Biotechnology & Healthcare, up 16% reflecting demand for healthcare equipment and treatments worldwide to combat COVID.

Whilst the average investment company was down 6% over the first half of the year, long-term performance remains strong with a gain of 170% over the past ten years.

Annabel Brodie-Smith, Communications Director of the Association of Investment Companies (AIC), said: “The first half of 2020 will be remembered for one thing, but whilst COVID has put huge pressure on health and livelihoods there have still been areas of strong performance, particularly given the rally of the past few months. Our Technology & Media sector is up 29%, reflecting the central role technology has played in our lives in recent months. Whether it’s watching Netflix, chatting on Zoom or keeping in touch with colleagues on Microsoft Teams, technology has been instrumental in helping us all keep going through lockdown.

“Investment companies in the Hedge Funds sector have achieved exactly what they set out to do, namely preserving capital during tough times and providing diversification to portfolios by investing in long and short equity positions as well as other more esoteric assets. Given the global effort to fight COVID, it’s no surprise that the Biotechnology & Healthcare sector is in the top performers too.

“It’s always interesting to look at the best-performing companies and sectors at the end of a half-year period, but it’s important to remember that investment is about the long term. Investors should have a balanced portfolio which suits their needs and if they have any concerns they should speak to a financial adviser.”

Top 10 investment company sectors over H1 2020

Share price total return (%) 01/01/20 - 30/06/20 01/07/19 - 30/06/20 01/07/16 - 30/06/20 01/07/15 - 30/06/20 01/07/10 - 30/06/20

AIC sector

H1

1 year

3 years

5 years

10 years

Overall weighted average ex VCTs

-5.6

0.3

13.0

45.3

169.5

Technology & Media

28.9

46.0

N/A

N/A

N/A

Hedge Funds

26.8

28.7

50.3

26.2

96.1

Biotechnology & Healthcare

15.6

25.3

50.1

83.0

505.8

Global

10.8

19.0

47.9

115.2

303.5

Insurance & Reinsurance Strategies

7.8

79.9

N/A

N/A

N/A

Global Smaller Companies

3.6

11.7

32.9

103.6

298.6

Japanese Smaller Companies

3.3

8.5

34.7

120.6

210.9

Asia Pacific

1.8

2.5

20.5

70.0

153.8

North America

1.4

5.2

23.8

74.2

208.4

Japan

1.1

7.7

25.7

75.6

276.1

Source: AIC/Morningstar. Sectors are weighted averages. N/A denotes where there are too few constituents to make an average.

-Ends-

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Notes

  1. Performance data is to 30 June 2020. Source: AIC/Morningstar.
  2. Sector averages are weighted averages.
  3. The Association of Investment Companies (AIC) was founded in 1932 to represent the interests of the investment trust industry – the oldest form of collective investment. Today, the AIC represents a broad range of closed-ended investment companies, incorporating investment trusts and other closed-ended investment companies and VCTs. The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s mission statement is to help members add value for shareholders over the longer term. As at the end of May, the AIC had 361 members and the industry had total assets of approximately £197 billion.
  4. Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance. The value of investment company shares, and the income from them, can fall as well as rise. You may not get back the full amount invested and, in some cases, nothing at all.
  5. To stop receiving AIC press releases, please contact the communications team.

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Media enquiries

Annabel Brodie-Smith
Communications Director
Tel: 020 7282 5580
annabel.brodie-smith@theaic.co.uk
@annabelbrodies
@aicpress

Elmley de la Cour
Communications Manager
Tel: 020 7282 5583
elmley.delacour@theaic.co.uk
@aicpress

William Sanderson
Communications Executive
Tel: 020 7282 5584
william.sanderson@theaic.co.uk
@aicpress