Smaller company funds got off to a flying start in January, according to figures from Lipper.
The best-performing fund category was UK smaller companies, which gained 6.37 per cent, with Japanese smaller companies on 3.96 per cent while European smaller companies gained 2.69 per cent.
Technology and telecommunications was the third-best perfoming sector, with a 3.9 per cent gain after a fall of 0.98 per cent in December last year The best-performing fund overall was CF technology with a 13.15 per cent return. UK smaller companies fund BWD UK micro cap produced a best return of 10.25 per cent while Threadneedle limited issue (UK all companies sector) was on 10.2 per cent and Artemis New Enterprise (technology and telecoms sector) on 10.01 per cent.
Asian sectors performed well, with the Far East excluding Japan and Far East including Japan groups returning 3.14 per cent and 2.16 per cent respectively.
Global emerging funds rose by 2.17 per cent, with Latin American funds gaining 1.03 per cent.
UK unit trusts and Oeics showed a gain in January of 0.94 per cent.
Fixed-interest categories fell, with all posting negative returns except the UK other bond and money market funds. The worst-performing equity sector was UK equity income which returned 0.25 per cent.
Lipper head of UK research Brian Harvey says: “The global economic recovery continued in January reflecting the cautious optimism that remains in major markets. For 2004, a key focus will be interest rates and the impact that rises will have on equity markets. 2003's 20.32 per cent gain in fund returns is unlikely to be repeated this year.”