Market Returns – a whistle-stop tour of some of the movers and shakers during the quarter

The chart shows the returns in local currency across a cross sample of major indices.

The table below shows Investment Association sector average returns broken down by asset class and geography, this time in sterling. The US dollar was strong in 2022 vs. sterling, yen and euro but there has been a step change in Q1 ’23 and sterling has found favour.

Data from FE Analytics

Most asset classes thrived in the first quarter of 2023. North American equities and UK direct property, both of whom found themselves at the bottom of the table last quarter, remained at the bottom of the pile while Europe excl. UK equities, had another poll position quarter finish in low double-digit territory. Index-Linked Gilts swapped its second to bottom place from last quarter to second to top this quarter.

The following table shows the winners and losers in terms of the industrial sector for the quarter in local currency:

Data from FE Analytics

Sectors that have been the darlings over the last decade returned to the spotlight, with technology and consumer discretionary (which hides within it names such as Tesla and Amazon), were the only sectors to produce double-digit returns over the quarter. Old economy sectors, those that have not advanced significantly from a technology perspective, were relegated to the bottom of the table.

There has been a notable style switch in the first quarter of 2023, with ‘growth’ as an investment style significantly outperforming ‘value’. Growth stocks, which have been leading markets for the last decade, fell out of favour in the last quarter of ‘22 but have enjoyed a return to the limelight.

Fixed Income

It has been a volatile quarter for fixed income and index-linkers particularly, who finished the quarter in positive territory, a reversal from the previous quarter. We continue to use strategic bonds but have reduced short-dated fixed income funds and have tentatively started to increase duration; the fall in fixed income markets provided an opportunity to add to select pockets of value within fixed income.


Sterling reigned supreme in the first quarter of 2023. Whilst the story of 2022 was a strong US dollar, particularly against sterling, year to date sterling is en vogue.

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