Interactive Investor

The high-risk funds bucking the downward trend

7th March 2022 13:53

Douglas Chadwick from ii contributor

Funds investing in this part of the world have been one of the few places to make money in recent weeks, points out Saltydog analyst.

This content is provided by Saltydog Investor. It is a third-party supplier and not part of interactive investor. It is provided for information only and does not constitute a personal recommendation.

It has been a difficult couple of months for investors. At the beginning of the year, there was still concern surrounding the Omicron variant of Covid-19, and fears were mounting over inflation and rising interest rates. Now, the headlines have been taken over by the terrible war in Ukraine.

Nearly all the major stock markets around the world went down in January. February was not any better, and March has got off to a shaky start.

Stock Market Indices 2022
Index Country January February  1 to 5 March
FTSE 100 UK 1.1% -0.1% -6.3%
FTSE 250 UK -6.6% -3.9% -8.0%
Dow Jones Ind Ave US -3.3% -3.5% -0.8%
S&P 500 US -5.3% -3.1% -1.0%
NASDAQ US -9.0% -3.4% -3.2%
DAX Germany -2.6% -6.5% -9.4%
CAC40 France -2.2% -4.9% -9.0%
Nikkei 225 Japan -6.2% -1.8% -2.0%
Hang Seng Hong Kong 1.7% -4.6% -3.6%
Shanghai Composite China -7.6% 3.0% -0.4%
Sensex India -0.4% -3.0% -3.4%
Ibovespa Brazil 7.0% 0.9% 1.2%
RTSI Russia -10.1% -34.7% 0.0%

Data source: Morningstar.

All these indices are now lower than they were at the end of last year, except for the Brazilian Ibovespa, which continues to buck the trend. So far this year it has gone up by more than 9%.

Our analysis of the Investment Association (IA) sectors also shows most sectors making losses in February.

Past performance is not a guide to future performance.

However, there were a few that managed to make gains. UK Direct Property went up by 0.65%, North American Smaller Companies made 1.08% and Japanese Smaller Companies rose by 1.99%.

The best-performing sector was Latin America, gaining 3.84%. In our weekly analysis, we group together the funds from this sector with the funds from the Specialist sector and the other thematic sectors such as Infrastructure and Healthcare.

There are five funds we include in our ‘Latin America SubZone’, and this is how they were doing when we looked last week.

Fund SubZone
(If Applicable)
4 Week 12 Week 26 Week
Decile Return Decile Return Decile Return
Liontrust Latin America   Latin America 1 5.6% 1 15.4% 6 -6.7%
ASI Latin American Equity   Latin America 2 4.9% 1 14.6% 5 -2.1%
Threadneedle Latin America   Latin America 2 3.9% 2 8.8% 9 -16.5%
Invesco Latin American   Latin America 3 3.5% 2 10.2% 3 0.3%
Stewart Investors Latin America   Latin America 5 -0.3% 2 6.0% 4 -0.8%

Data source: Morningstar. Past performance is not a guide to future performance.

With most markets trending down, both of our demonstration portfolios (Ocean Linger and Tugboat) are mainly in cash: 90% and 70% respectively.  We have not made any investments for the last few weeks.

One of the funds that we do hold is from the Latin America sector. At the beginning of February, we invested in the Stewart Investors Latin America fund. It is a shame that we did not pick one of the other funds, but at the time it was the front runner with a four-week return of 5.9%. It is easy to be wise in hindsight.

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These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.