The punchy fund sector topping the tables in June
Saltydog looks at a niche group of portfolios producing big gains.
7th July 2026 09:41
by Douglas Chadwick from ii contributor
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After a strong equity rally during April and May, June was more mixed. Only half of the major global stock market indices that we track each week made gains.
The star performer was the Japanese Nikkei 225, which went up by 5.6%, adding to the 11.9% that it had made in May and the 15.3% in April. At the opposite end of the spectrum, the Hong Kong Hang Seng fell by 8.9%.
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Closer to home, the FTSE 100 ended the month up 0.8%, while the more domestically focused FTSE 250 fell by 1.8%. Across the Atlantic, the Dow Jones Industrial Average gained 2.5%, while the S&P 500 fell by 1.1% and the Nasdaq dropped 2.8%.
However, the performance of the UK-domiciled funds was more encouraging, with around three-quarters making headway over the month. Most of the Investment Association (IA) sectors also made positive returns in June. Of the 33 that we regularly monitor, 28 posted one-month gains.
Leading the way was the new Healthcare & Biotechnology sector, up 8.2%.
Past performance is not a guide to future performance.
The Healthcare sector was first introduced in 2021 as one of six new sectors made up of funds that had previously been in the Specialist and Global sectors. The others were India/Indian Subcontinent, Financials & Financial Innovation, Infrastructure, Latin America, and Commodities & Natural Resources.
(The IA does not provide performance data for the Commodities & Natural Resources sector because comparisons may be inappropriate given the diversity of the funds.)
The original Healthcare sector was for funds “that invest at least 80% of their assets in equities of companies that operate in sectors related to healthcare including industries such as pharmaceuticals, healthcare equipment and services in any country. Funds should be diversified across healthcare sectors; some funds may have a thematic approach (e.g. healthcare innovation).”
At the time it specifically said: “Funds focused solely on biotechnology or life sciences will be classified to the Specialist sector.”
However, as of 1 June 2026, the definition was expanded to include biotechnology companies.
The new sector definition is: “Funds that invest at least 80% of their assets in equities of healthcare companies and related sectors including industries such as pharmaceuticals, healthcare equipment and services, and biotechnology and life sciences in any country.”
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There are currently only a small number of UK-domiciled funds in the Healthcare & Biotechnology sector. However, investors can also access a range of Ireland and Luxembourg-domiciled funds through the main UK investment platforms.
Here are a few funds that caught our eye over the last month.
Healthcare & Biotech funds - June 2026
Data source: Morningstar. Past performance is not a guide to future performance.
When a new sector is introduced or a sector definition changes, it inevitably takes a while for funds to settle into their new categories.
The Pictet-Biotech I dy GBP (B554RF5) fund, which is domiciled in Luxembourg, is still listed in the Specialist sector, but could possibly move to the Healthcare & Biotechnology sector at some point in the not too distant future.
It was the best-performing fund in our analysis in June, with a one-month return of 14.4%.
Past performance is not a guide to future performance.
Much of this year’s stock market growth has been attributed to artificial intelligence (AI), and the companies providing the hardware and infrastructure needed to help it expand.
At some point, we would expect that to include the businesses that can make the most of the technology as it develops. Biotechnology companies could potentially be some of the greatest beneficiaries.
When the IA makes changes to its sectors, it is usually to reflect a shift in the investment landscape. The fact that it is making the biotechnology funds more prominent probably means that they are worth keeping on the radar.
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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.