Whether you’re a passive or active investor, it’s always worth getting a quick snapshot of the markets from time to time. So we’re going to take a look at the areas that had the best investing returns last month.
Read on to find out what’s been performing well and what this might tell us about the future direction of the market.
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Which sectors had the best investing returns?
As summer rolls on, so too do the markets. According to the latest data from Saxo Markets, here are the four top-performing investment sectors from last month:
1. Cybersecurity (+5.1%)
This was also a high-performing investment sector in June. It’s an industry that is in demand with pretty much everything being digital these days.
What’s also interesting about this area is that there are some strong British players. Companies like Darktrace and Ultra Electronics are just two examples of businesses listed on the London Stock Exchange (LSE) that are excelling in this field.
2. Battery (+3.1%)
When you think of batteries, something like the Duracell Bunny might spring to mind. But this is actually a diverse and far-reaching investment sector.
This theme is somewhat of an offshoot of the green transformation. It includes companies from around the world who concentrate on power. So not only does it feature businesses pioneering energy for the EV (electric vehicle) market, it also refers to miners and manufacturers of various materials that we use to run our daily lives.
3. MSCI World USD (+1.8%)
The MSCI World is basically a global equity fund. The success of this type of investment is good news for passive investors.
Passive investing does have its downsides and can often be beaten by individual themes. However, that wasn’t the case in July. Sticking with something simple like a global index fund would have proved a decent choice for investors.
4. India GDRs (+1.3%)
As the world continues its recovery from the coronavirus pandemic, so too do the ravaged economies of countries like India.
In case you were wondering, ‘GDR’ stands for ‘global depositary receipt’. It is basically an indirect way to invest in certain markets that can be hard to access. GDRs are issued by banks and represent shares in a foreign stock. Investing this way just makes life a little easier and trading of these shares more liquid.
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What do the experts say about investing in July?
Overall, it was a bit of a drab month for equities. Even though there’s a positive forecast for economic growth in the UK, there remains a lot of uncertainty around the global recovery and hot topics like inflation.
Peter Garnry, head of equity strategy for Saxo Markets had this to say about last month’s performances: “Our Cyber Security basket performed well in July primarily because of two things. The first was a strong earnings momentum for the industry.
“The second reason is that American President Joe Biden in July signed an official agreement, pledging to strengthen the US’ cybersecurity efforts and ensure that the country is prepared for future cyber attacks.
“We have also recently seen China crack down on its for-profit education industry, its wider technology industry and Chinese listings in the US. It seems as though this is due to a desire to move the country’s industry towards other technologies within renewable energy and semiconductors.”
How do I start investing?
Whether you’re just starting out or already a seasoned investor, it’s really important to use a share dealing account that works for you.
You should have a strategy in place. But it’s still useful to have a variety of investment options. This will allow you to change course as necessary, depending on big changes in the financial world, or your own circumstances.
Just remember that with any investment you may get out less than you put in. So always make sure the rest of your finances are in order before you consider investing.
