India was the best performing investment fund sector over the summer with the infrastructure sector faring the worst, according to new analysis.

Data from FE Fundinfo showed that the average fund in the IA India/Indian Subcontinent sector achieved a total return of 7.1% between July and September.

In contrast, the average fund in the infrastructure sector recorded a fall of -5.09%.

The company said the India/Indian Subcontinent sector was buoyed by robust economic growth, strength in the US dollar and a resilient domestic market.

Indian equities also tend to work oppositely to Chinese equities, which suffered last quarter on the back of weakening economic growth, it said.

The second-best performing sector was the commodity/natural resources sector where the average fund climbed 4.79% during the period.

The USD High Yield Bond sector was third with a 3.50% return, with the Global High Yield Bond sector (3.12%) and the EUR High Yield Bond sector (3.10%) making up the rest of the top five. 

At the other end of the scale the poor performance recorded by the infrastructure sector could be due to uncertainties surrounding infrastructure investment and funding, while potential delays in government projects, supply chain disruptions, and labour shortages could have hindered progress, FE Fundinfo said.

Performing a little better was the UK Index Linked Gilts which saw a fall of -4.58%. It struggled mainly due to rising interest rates, causing a decline in bond prices with investors shifting their focus towards higher-yielding assets. 



The rest of the bottom three were made up of the European Smaller Companies sector (-3.70%), the Healthcare sector (-3.09%) and the Europe Excluding UK sector (-2.25%). European equities were down last quarter due to Chinese and global manufacturing slowdown.

Charles Younes, deputy chief investment officer, FE investments, said: "During the summer the markets have finally embraced the higher for longer rhetoric on the back of sustained inflationary pressures. Unsurprisingly, sectors with the most interest rates sensitivity have suffered. 



“Better than expected macro data, as well as OPEC decisions, have pushed oil price closed to $100. Cyclical equity sectors best benefitted from that trend. Despite the summer optimism, we remain cautious about the global outlook and won’t be surprised if the winners from this summer would be the losers this winter.”