Two different forces driving top funds
One theme leads the sectors, but specialist funds steal the show, explains Saltydog Investor.
7th September 2026 14:21
by Douglas Chadwick from ii contributor
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.
After a reasonable start to the year, nearly all the Investment Association (IA) sectors suffered losses in March. Out of the 35 that we regularly monitor, only the two money market sectors ended the month unscathed.
Markets then rebounded, and most sectors performed well during April, May and June.
An escalation in the conflict in the Middle East, and increasing concerns about the economic consequences, weighed on investor sentiment during July. Only 13 out of the 35 sectors made gains.
However, last month the picture improved significantly, with 30 sectors making headway.
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Data source: Morningstar. Past performance is not a guide to future performance.
In July, the leading sector was UK Equity Income, with a one-month return of 4.3%. UK All Companies and UK Smaller Companies also performed well, rising by 3.9% and 3.6% respectively. The worst-performing sector was Technology & Technology Innovation, which fell by 6.7%.
Last month, the UK sectors continued to make positive progress, but dropped down the rankings. The star performer was Technology & Technology Innovation, which bounced back with a 5.3% return. The next best was the recently expanded Healthcare & Biotechnology sector, up 4.8%, followed by Asia Pacific Excluding Japan, which gained 3.1%.
Past performance is not a guide to future performance.
Over the last couple of years, two themes have dominated financial markets.
One has been the rapid growth of artificial intelligence (AI), accelerated by the launch of OpenAI’s ChatGPT in late 2022. The other has been geopolitical uncertainty linked to Russia’s invasion of Ukraine, conflict in the Middle East and uncertainty surrounding US policy.
Both themes are clearly visible in our fund and sector analysis.
Funds in the Technology & Technology Innovation sector tend to have significant exposure to the large technology companies at the forefront of the AI revolution.
The sector had a slow start to this year, falling by 4.8% during the first quarter. It then rebounded strongly in the second quarter, gaining 35.6%, and by the end of August it was the best-performing IA sector of 2026.
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It was also the leading sector last month. Within the sector, Pictet - RoboticsI GBP (BDB6DB9) led the way, up 11.7%. AXA Framlington Glbl Tech Fund - Z Acc (B4W52V5) gained 6.2%, while Fidelity Global Technology W-Acc-GBP (BJVDZ16) rose by 5.2%.
Another fund benefiting from increased demand for semiconductors is Barings Korea I GBP Acc (B9M3RQ4), from the Specialist sector. Its largest holdings include Samsung Electronics Co Ltd DR (LSE:SMSN) and SK hynix Inc ADR (NASDAQ:SKHY). It also performed well in August, rising by 12.5%.
However, although Technology & Technology Innovation was the best-performing sector in August, the month’s leading individual funds came from somewhere quite different.
Four of our top five funds were ‘gold’ funds from the Specialist sector.
| Saltydog’s top five funds in August 2026 | ||
| Name | IA sector | Monthly return (%) |
| SVS Baker Steel Gold&Precious Mtls B Acc (BNGMZG1) | Specialist | 33.9 |
| Ninety One Global Gold I Acc £ (B1XFGM2) | Specialist | 33.8 |
| BlackRock Gold and General D Acc (B5ZNJ89) | Specialist | 32.5 |
| WS Ruffer Gold C Acc (B8510Q9) | Specialist | 31.5 |
| WS Amati Strategic Metals B Acc (BMD8NV6) | Commodities & Natural Resources | 29.6 |
Data source: Morningstar. Past performance is not a guide to future performance.
Unlike some exchange-traded funds (ETFs), which can invest directly in gold, these funds mainly hold shares in companies that mine and process gold and other precious metals. Their performance tends to reflect movements in the underlying gold price, although they can move much more dramatically, both on the way up and the way down.
The WS Amati Strategic Metals B Acc (BMD8NV6) fund has a broader remit and holds companies involved with a range of metals. However, a significant proportion of its portfolio is still linked to gold and silver miners.
Gold funds were the best-performing funds in 2025 and are now back on the move after a difficult few months.
The forces driving gold funds and technology funds are very different. Technology has benefited from enthusiasm for AI and rising demand for the infrastructure needed to support it. Gold has tended to benefit from geopolitical uncertainty and demand for assets perceived as safe havens.
That difference could also be useful to investors. The two areas are driven by different factors, so having some exposure to both could help diversify an investment portfolio.
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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.