Blue Monday, Bright Returns: Why markets are making investors smile

Blue Monday may have a reputation as the gloomiest day of the year, but investors reviewing their portfolios this January have plenty to smile about. Juliet Schooling Latter, research director at FundCalibre, highlights that, over the twelve months to 12 January 2026, a broad range of Investment Association (IA) sectors delivered eye-catching returns, underlining the rewards of staying invested despite gloomy headlines:

“Leading the way was IA Latin America, which topped the performance tables with a return of 35.87%, ranking first out of 51 IA sectors. A powerful rebound in commodity-linked economies, improving political stability in parts of the region and renewed global risk appetite all contributed to the rally.”

The dragon roars back

“China and the wider region also staged an impressive recovery. IA China / Greater China delivered a return of 24.89%, supported by selective policy stimulus, improving earnings expectations and a rebound from deeply depressed valuations. 

“Funds such as Fidelity China Special Situations, an Elite Rated favourite, have historically focused on bottom-up stock selection and structural growth themes within the region, helping investors access opportunities beyond the headline noise.

“The strength of emerging markets extended well beyond Latin America and China. After a decade of being largely ignored, the wider region benefited over the past year from a weakening US dollar and a more supportive macro backdrop. IA Global Emerging Markets rose 23.27%, helped also by easing inflation pressures and improving currency stability. Elite Rated strategies such as FP Carmignac Emerging Markets aim to capture long-term growth while actively managing the risks inherent in investing across diverse economies. 

“Asia also delivered robust gains, as demonstrated by IA Asia Pacific ex Japan returning 20.07% over the period. Japan itself enjoyed a resurgence, with IA Japan delivering a return of 19.69%, helped by corporate governance reforms, rising shareholder returns, and improving profitability. Funds such as Baillie Gifford Japan Trust have been well placed to tap into this evolving opportunity set.”

A European renaissance 

“Closer to home, Europe surprised on the upside. IA European Smaller Companies returned 19.21%, reflecting improving confidence in domestic growth and easing financial conditions. 

“IA Europe ex UK also performed strongly, gaining 18.33%, with Elite Rated funds such as BlackRock European Dynamic offering flexible exposure across the region.  Meanwhile, IA Europe including UK returned 17.27%.

“UK equities provided a welcome boost. IA UK Equity Income rose 18.24%, supported by resilient dividends and attractive valuations. Elite Rated funds such as Artemis Income remain popular with investors seeking dependable income alongside selective capital growth. IA UK All Companies returned 15.20% over the period.”

Mining boom and tech momentum

“Commodities were another standout theme. IA Commodity & Natural Resources returned 23.86%, benefiting from supply constraints, resilient demand and ongoing investment linked to the energy transition. Elite Radar fund WS Amati Strategic Metals offers diversified exposure to this space, aiming to balance capital growth and income through the commodity cycle.

“Technology also continued to play a key role in lifting returns. IA Technology & Technology Innovation delivered strong double-digit performance, underpinned by sustained investment in artificial intelligence, automation and digital infrastructure. Strategies such as Landseer Global Artificial Intelligence are positioned to benefit from a rapidly evolving tech landscape.

“The message this Blue Monday is a simple but important one – market returns rarely align with mood or headlines. Over the past year, some of the strongest performance came from regions and sectors that had previously been out of favour.”