Gold and mining funds were the best performing sectors in the first quarter, returning an average 11.1%, according to S&Ps review of the period.
Alison Cratchley, the director of fund research at S&P, says gold was popular as a safe haven and as a hedge against the inflation that may result from quantitative easing.
Global technology funds delivered an average return of 1.2%, benefiting from strong balance sheets and attractive valuations within their investment universe.
Investors choice of sector has been crucial to their returns, Cratchley says. Of the 16 S&P sectors, only global technology and gold and mining delivered a positive return, while eight sectors posted double-digit losses.
Global property was the worst laggard over the quarter with the average fund falling 20.4%, followed closely by finance funds which were down 19.8%. Outside the extremes, returns varied from -0.6% for global technology, media and telecoms, and -16.5% for utilities.
Even within the inherently more defensive sectors such as gold and mining, and healthcare, managers are eschewing risk, Cratchley says. Evy Hambro, the manager of the BlackRock Global Funds World Gold fund, reports that he continues to avoid companies that will require large amounts of capital expenditure or have highly leveraged balance sheets.
Overall, the portfolio has limited exposure to companies that are not in production, are smaller-cap, and do not pay a dividend.
Meanwhile, managers in the property sector remain pessimistic on the outlook for the asset class, as rising interest rates and credit spreads could have a negative effect on real estate prices, she adds.