Which funds were the top performers in May 2022?

How did funds do in May 2022?

Let us know what you think of the current market situation by posting a comment.

As someone who has invested for *cough* “quite a long time” and has been through a few hair-raising periods such as the dot.com crash back in 2000 and the dark long days of 2008, I still don’t find it much easier when markets get a bit ugly.

I know the drill. Don’t panic. Don’t sell if you don’t need to. Look to top up positions in funds and trusts which have been unfairly punished. The stock market is on sale…..yadda yadda. And of course this is right. But it’s so tempting to try and placate ourselves by DOING something!

It’s not easy to feel that positive about the short-term outlook. Yesterday the Fed increased rates by an aggressive 0.75% which will have a temporary feelgood effect in markets but not make anything materially better right now. The war continues. Inflation bites. And there aren’t any obvious pockets of opportunity.

People will talk about infrastructure and carbon transition as opportunities, or so-called ‘alternative assets’ but there is an inherent problem with these things. They are not liquid and not easy to sell. So they don’t really suit retail investors, as anyone stuck in a property fund in the past will know all too well. Or dare I say “Neil Woodford”? One of the problems with his fund was that he strayed into buying less liquid assets and so when we all got cold feet and wanted to bail in the same hour or the same day – we couldn’t.

I hold some infrastructure funds and have done so happily for years. But when I hear fund managers look for the ‘next big thing’ and try to get too clever and wave wands and do jiggery-pokery to make clever products (sub prime and collateralised debt obligations anyone?), I get nervous. The chase for ‘alpha’ (returns over the market average) will heat up as returns fall, managers try to keep their fees and margins the same, but consumer returns after fees look dismal. I think we need to be careful not to be seduced by shiny things, and remember that basically we’re looking for decent companies which make products or services we understand and which do so at a profit.

Because sometimes markets are just going to be rough for a bit. Much like a teenager having a strop. And the only way to really ride it out is with patience.

If you’re looking for some inspiration this month, then as usual we bring you our lists of the best-selling funds across all major retail platforms. I always like having a look at the consensus view, which does not mean I always follow it.

What do you think? Let us know by adding a comment below.

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