Corporate earnings boost share performance amidst interest rate concerns

Amidst April’s market dynamics, corporate earnings buoyed share performance, offsetting concerns about prolonged high interest rates, according to data.

This is one of the findings of investment solution provider Fidelity International’s latest report disclosing the top-selling funds, shares and investment trusts in April, highlighting a continued preference for big tech and a resurgence of interest in money market funds.

The report found sustained investor interest in index tracker funds, particularly in the technology sector, despite challenges faced by some major tech companies earlier in the year. Money market funds regained traction as interest rate expectations turned more hawkish.

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Ed Monk, associate director at Fidelity International, noted the enduring appeal of big tech investments among Fidelity’s Personal Investing customers, with the Legal & General Global Technology Index Trust remaining a top choice. He highlighted the uneven performance within the tech sector, with notable losses from companies like Tesla and Apple.

Investors also positioned themselves for global market growth through exposure to funds like the Legal & General Global Equity Index Fund and Legal & General Global 100 Index Trust, offering diversification and risk mitigation benefits.

Monk observed the sustained popularity of the Jupiter India Fund but noted potential market volatility due to ongoing general elections. Money market funds, including the Legal & General Cash Trust and Royal London Short Term Money Market Fund, returned to favour in April amid high interest rates, with some investors likely positioning funds at the start of the new tax year.

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In the shares segment, diverse value areas such as financials and miners demonstrated strength, reflected in the performance of the FTSE 100, which surpassed previous highs. Monk highlighted a range of popular shares across industries, including airlines like easyJet, rebounding from pandemic lows, and technology group Ocado, which reported revenue growth amidst market fluctuations.

Monk highlighted Fidelity Personal Investing customers’ interest in global markets through investment trusts like JP Morgan Global Growth & Income, F&C Investment Trust and BBGI Global Infrastructure, featuring prominently in ISA and SIPP tables.

“The City of London Investment Trust was one of the month’s best-selling UK focused trusts. Since over 60% of the revenues of the companies it is invested income from overseas, it offers a good level of diversification to investors’ portfolios. Technology focused trusts also fared well. Polar Capital Technology Trust remains popular among both ISA and SIPP investors,” said Monk.

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