The funds and sectors leading the way so far in 2026

Of the 57 Investment Association (IA) fund sectors just three were in the red for the first six months of the year, figures from FE Analytics show.

At the bottom of the pile is India/India Subcontinent (average loss of -6.9%), followed by tiny declines of -0.2% and -0.1% for EUR Mixed Bond and EUR Government Bond.

Global funds, the most-popular sector among retail investors, have delivered gains of 10.1%, while the two main UK fund sectors, UK Equity Income and UK All Companies, are up 6.1% and 5.2%.  

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Both global and UK equities continued to climb despite geopolitical tensions, a higher oil price, and concerns over the inflationary impact of higher energy costs.  

Technology shares also continued to power higher amid plenty of investor enthusiasm over the potential of artificial intelligence. Technology & Technology Innovation tops the sector rankings, with an average gain of 29.5%.

Another trend is the resurgence of non-developed markets, with Asia Pacific Excluding Japan (average gain of 26.6%) and Global Emerging Markets (average gain of 25.4%) taking second and third place among the sectors.

As our recent On The Money podcast explored, key drivers of performance include low valuations ahead of the rally, weakness in the US dollar, and the AI theme driving returns given that some of the world’s largest hardware companies are based in the region. In particular, this has led to huge stock market returns for South Korea and Taiwan.

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Something to bear in mind is that concentration risk, a problem for US stock markets for a number of years now, has become more prevalent. In the MSCI Emerging Markets Index, Taiwan Semiconductor Manufacturing Co Ltd ADR (NYSE:TSM) accounts for a 15.1% weighting, followed by Samsung Electronics Co Ltd DR (LSE:SMSN) and AI memory chipmaker SK Hynix, with weightings of 8.2% and 7.7%.

In terms of the overall best fund performers, Korea funds dominate, with Franklin FTSE Korea ETF (LSE:FLRK) up 110.9% and Barings Korea Trust up 105.4%, while those with exposure to an exchange-traded fund (ETF) investing in Taiwan will be sitting on gains of 70%. 

Among the options on interactive investor are iShares MSCI Taiwan ETF (LSE:ITWN), Franklin FTSE Taiwan ETF (LSE:FRXT) and Xtrackers MSCI Taiwan ETF (LSE:XMTW).

Beyond South Korea and Taiwan, other top overall fund performers include Polar Capital Global Technology (up 74.7%),  Amundi MSCI Semiconductors ETF (LSE:SEMG) (up 70.9%), and Polar Capital Smart Energy (up 70.6%).

For investment trusts, strong performers include Baker Steel Resources (LSE: BSRT), Seraphim Space (LSE:SSIT), Polar Capital Technology (LSE:PCT) and Pacific Horizon (LSE:PHI), with respective gains of 65.2%, 56.5%, 53.7% and 50%.