[Sector Edition] What’s Hot, What’s Not: Europe Hot, Asia and Linkers Not

Fri 03 Mar 2023

By James Newstead

Access Level | public

What's Hot What's Not


hot not

What’s Hot

  • The theme among our big hitters this month is fairly simple, Europe up (UK included).
  • Cheap European small-caps attracted buyers, ignoring recessionary concerns. 
  • UK Equity Income notably outperformed the broader UK market, as that sector tends to have a Value-style bias. This includes sectors that tend to outperform during high inflation, like energy, commodities, and consumer staples.

What’s Not

  • The China sector struggled this month. After a 35%+ run from late October to late January, thanks to China’s unlocking, though just in the last week it may have bottomed.
  • This “breather” stretched across to other China influenced sectors in Asia and Emerging Markets.
  • More concerning is that “Linkers” or UK Index Linked Gilts feature yet again…
  • as we have said many times, what often appears “safe” is sometimes nothing of the sort, and particularly so at the end of a 40-year cycle of falling inflation. This is made very obvious by the chart below, depicting the FTSE 100 and S&P 500 vs Vanguard’s UK Inflation Linked Gilt fund during its meltdown last year.


ftse s&p vanguard


What’s Hot


Last Month’s Performance %

European Smaller Companies


Europe Excluding UK


UK Equity Income


UK All Companies


Europe Including UK



What’s Not


Last Month’s Performance

China/Greater China


UK Index Linked Gilts


Asia Pacific Excluding Japan


Global Emerging Markets


Asia Pacific Including Japan



Performance 01/02/2023 – 28/02/2023

All performance figures quoted as total return in GBP 



What's Hot What's Not


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