Small firms top tax year chart for investors - Investments - News - Moneyfacts


Small firms top tax year chart for investors

Small firms top tax year chart for investors

Category: Investments

Updated: 15/04/2011
First Published: 15/04/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Investment funds with a focus on smaller firms provided investors with the best returns in the 2010/11 tax year, it has been revealed.

Investors who placed their faith in funds from the UK smaller companies sector will have had the most to be happy about, after Hargreaves Lansdown revealed the sector enjoyed growth of almost 28% in the last tax year.

Funds with a focus on smaller firms in North America were the second best performers, delivering an average return of almost 19%, while the European smaller companies sector was just a short distance behind.

The triumph of smaller firms in the UK is likely to come as a surprise to many investors given the difficult times the economy has experienced over the past year.

However, Danny Cox, head of advice at the investment group, said the success of UK smaller companies funds demonstrates that stock markets and the economy are not the same thing.

"Despite the public sector cuts and austerity measures, many companies in the UK are well positioned, profitable and able to benefit from this private sector and export lead recovery," he added.

At the other end of the scale, investors who entrusted their money to Japan funds are likely to have been left disappointed.

The sector reported an average loss of 8.5%, while funds focused on smaller firms from the region lost an average of 5.25%.

Unsurprisingly, money market funds also failed to impress, returning just 0.2% as interest rates remained historically low.

"It is hardly a surprise that Japan is propping up the performance tables after the recent natural disasters or that money market funds have barely produced a positive return," said investment manager Ben Yearsley.

"Over the long term we expect Japan to recover though in the short term there remains some uncertainty.

"Money market funds will remain unattractive while interest rates remain at this level."

If you're interested in investments, but are unsure how to get started, Skipton Financial Services will be able to help.

They can compare over 1,100 ISAs and funds from over 60 providers – if you need help in choosing the right investment, call Skipton Financial Services free on 0800 731 5342

Looking for the right investment? Compare investments

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Pound plummets as FTSE soars

A second significant fall in the pound has taken place. While this drop may be unhappy news for people who are about to go on holiday, it has given the FTSE 100 quite a boost, as it has passed the 7,000 mark for the second time in as many years.

Would you risk the stock market for £400,000?

It’s becoming increasingly difficult to secure decent returns on cash savings these days, yet we all know that investing in cash is the safest option. But would you risk that level of security for the chance of a £400,000 profit?

Don’t be a victim of investment fraud

Low savings rates have led many of us to desperately scour the market in hopes of finding a deal that will pay more. However, this search means that more and more savers are being tempted by unfamiliar investments.