'Safe haven' funds find their time to shine as global stock market sell-off sees shares tank in March

  • Gilt, bond and property funds topped performance tables in March
  • The safe haven funds benefited from a global sell-off across stock markets 
  • Funds focused on North America, technology and China suffered most

By LOUISE HILL FOR THIS IS MONEY

Updated:

Investors who bought into gilts, bonds and property funds were left sitting pretty in March as heightened volatility saw the 'safe assets' rise as stock markets were hit.

So-called 'safe haven' UK gilts had a total sterling return of 2.31 per cent during the month, making the sector the best performing out of all the sectors listed by industry body, the Investment Association. 

Troubles in global stock markets meant equity funds - those invested in shares - dominated the list of worst performers for the month, with North American funds floundering.

Investors who bought into gilts, bonds and property were left sitting pretty in March while equity funds suffered negative returns

Investors who bought into gilts, bonds and property were left sitting pretty in March while equity funds suffered negative returns

Funds in the IA North America sector lost 5.57 per cent over the month and were hit heavily by falls in the value of technology stocks, which forced returns in the tech and telecommunications sector down 5.27 per cent.

Tech stocks suffered after President Donald Trump's tweeted attacks on Amazon and Facebook was hit by the Cambridge Analytica data scandal.

Funds invested in property returned a solid 0.64 per cent in March, the third best performing sector, while corporate bonds in third place returned 0.34 per cent. 

After the threat of US vs China trade war hit markets, funds in the China IA sector became the third worst performers of the month with losses of 4.4 per cent.

Architas investment director Adrian Lowcock, who compiled the figures using FE data, said volatility has been a key differentiator between 2018 and 2017.

'2018 is clearly shaping up to be a significantly different year to 2017 as volatility continues to dominate markets,' he said.

Funds in the North America IA sector lost 5.57 per cent over the month after a global sell off hit stock markets

Funds in the North America IA sector lost 5.57 per cent over the month after a global sell off hit stock markets

He added: 'Investors have sought the safe havens of government and corporate bonds in March as concerns over future global growth have risen significantly. 

'While the initial sell-off in January and February was driven by fears of interest rates rising faster than expected, the current bout of volatility is being driven by concerns over a US trade war with China which could damage global growth, and increased focus on the future regulation of the technology sector.' 

'Each of these has the potential to drag on and dominate markets for the foreseeable future.'

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