Quarterly Outlook
Q3 Investor Outlook: Beyond American shores – why diversification is your strongest ally
Jacob Falkencrone
Global Head of Investment Strategy
Investor Content Strategist
Several themes emerged from our best performing ISA-eligible ETFs last month. One is the performance of emerging markets, which have been attracting inflows following the US dollar’s move lower in Q2, despite concerns about tariffs weighing on economic growth prospects.
Asia stood out in July, albeit there is a question about whether this will continue in light of tariffs. Thailand was hit with a 36% tariff on 2 April, but by the 1 August deadline this had been cut to 19%. Thailand’s stock market hit a five-year low a month ago on political upheaval but roared higher through July and indicators suggest a relief over the level of tariffs being imposed. Meanwhile a slew of China-focused funds made the top-performing list for the month as benchmarks in the mainland rose 3-5% over the month as investors pin hopes on a deal being done between the US and China on trade.
Top Performing ISA ETFs of the last month
Xtrackers MSCI Thailand UCITS ETF
Xtrackers MSCI Korea UCITS ETF
Amundi MSCI China Tech UCITS ETF
Invesco EURO STOXX Optimised Bank UCITS ETF
Xtrackers MSCI China UCITS ETF
HSBC MSCI China UCITS ETF
Invesco S&P China A MidCap 500 Swap UCITS ETF
L&G Pharma Breakthrough UCITS ETF
Xtrackers MSCI USA Information Tech UCITS ETF
IShares S&P 500 Utilities Sector ETF
(Source: Saxo Investor, %1m change, ISA-eligible equity ETFs with a minimum 3-star Morningstar rating)
Among the top ISA-eligible Mutual Funds of the last month the best performers were the Polar Capital Biotechnology Fund, Polar Capital Global Technology, Franklin Templeton’s Biotechnology Discovery Fund and the China-focused Abrdn SICAV I – ALL A.
Among Saxo clients most bought ETFs in July were the Vanguard FTSE All-World UCITS ETF, the Vanguard S&P 500 Dist UCITS ETF and the Invesco QQQ Trust, Series 1 ETF.
For single stock investment ideas read our client trends report for July.