Top Performing Investment Sectors in 2023

The Private Equity sector is the top-performing sector this year, data from the Association of Investment Companies (AIC) has revealed. The sector produced a return of 43% over the 11 months to the end of November 2023, whereas the average investment company returned 3% over the same period.

The Technology & Technology Innovation sector achieved the second highest return of 37%, while the North America sector came third with a return of 14%. The fourth best-performing sector was Europe which returned 12%and the India/Indian Subcontinent sector came fifth returning 10%.

Annabel Brodie-Smith, Communications Director of the Association of Investment Companies (AIC), said: “It’s been a challenging year for investment companies, with high inflation and rising interest rates, unhelpful cost disclosure regulation and war breaking out in the Middle East and continuing in Ukraine. However, many investment companies have performed well over the first 11 months of the year and this accelerated in November with better-than-expected inflation figures bringing an early Santa rally. 

“Private Equity, the best-performing sector has come back strongly this year, with 3i the top-performing investment trust of the year. Many other trusts in the Private Equity sector are performing well this year but are currently trading on wide double-digit discounts. The Technology & Technology Innovation sector has also bounced back, with the rise of artificial intelligence driving the performance of the ‘Magnificent Seven’ technology stocks in the US.

“This year’s top-performing sectors reflect the market and economic conditions in 2023. It’s important to remember that investment is about the long term. Rather than focusing on today’s winners, it’s important to build a balanced portfolio of investments which suits your needs.”

Ten best-performing sectors in the year to date

AIC sectorShare price total return %
YTD*1 year3 years5 years10 years
Average investment company3.362.4316.0488.81153.61
Private Equity43.3944.3889.52145.21455.55
Technology & Technology Innovation37.4828.349.05N/AN/A
North America13.6210.2821.11134.45202.40
Europe12.2710.3916.6150.07134.33
India/Indian Subcontinent10.407.8844.2538.67184.94
Property – UK Logistics8.215.250.4637.30N/A
Debt – Structured Finance7.768.2924.2418.38N/A
Debt – Loans & Bonds7.678.8214.4211.6719.91
UK All Companies4.943.222.8923.1170.95
Leasing3.636.86110.26-11.1357.96

Source: theaic.co.uk / Morningstar. N/A means there is no performance history for this period. Ordinary share classes only. Excludes VCTs. * Year to date = 11 months to 30 November 2023

Ten best-performing investment companies in the year to date

CompanyAIC sectorShare price total return %
YTD*1 year3 years5 years10 years
Average investment company3.362.4316.0488.81153.61
3i GroupPrivate Equity70.9873.10134.22224.52791.79
Manchester & LondonGlobal56.4344.26-13.2139.42152.17
JPMorgan Emerging Europe, Middle East & AfricaGlobal Emerging Markets54.5562.10-75.40-67.77-59.94
Doric Nimrod Air TwoLeasing44.4348.35171.4038.4281.27
Polar Capital TechnologyTechnology & Technology Innovation38.9227.8011.92100.59405.06
Princess Private EquityPrivate Equity34.4025.767.5536.15193.45
Allianz Technology TrustTechnology & Technology Innovation34.2930.251.81112.03445.45
Nippon Active ValueJapanese Smaller Companies33.6628.7355.36N/AN/A
DP Aircraft ILeasing30.5646.8717.50-93.56-89.93
Amedeo Air Four PlusLeasing29.6732.3082.49-34.15N/A

Source: theaic.co.uk / Morningstar. N/A means there is no performance history for this period. Ordinary share classes only. Excludes VCTs and companies undergoing liquidation. * Year to date = 11 months to 30 November 2023

In the 11 months to 30 November, 3i Group from the Private Equity sector was the best-performing investment company up 71%, and second came Manchester & London from the Global sector up 56%. They are followed by JPMorgan Emerging EuropeMiddle East & Africa from the Global Emerging Markets sector up 55%, and Doric Nimrod Air Two from the Leasing sector up 44% over the same period. The Leasing sector has three companies in the list of ten top-performing companies, whilst the Private Equity sector and the Technology & Technology Innovation sector both have two companies featuring in the top ten performers.

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