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79.8% of funds delivered positive returns over 1 month to the end of January 2026, but results ranged from -10.45% to +27.82%, showing wide variation beneath the surface.
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Over 5 years, returns ranged from -98.30% to +388.75%, reinforcing how significantly outcomes can differ between funds in the same market.
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IA Latin America and IA Commodity/Natural Resources were the strongest sectors over 1 month, while IA India/Indian Subcontinent was the weakest.
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Several sectors that ranked highly over 1 month, including IA China/Greater China, sit near the bottom over 5 years, highlighting how short-term tables can mislead.
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In sectors such as IA Commodity/Natural Resources and IA Technology and Technology Innovation, performance differences between funds exceeded 8% to 15% in a single month, increasing fund selection risk.
Investors often look at performance tables to see what has just done well. January 2026 was no different. The majority of funds showed gains over shorter periods and several sectors delivered strong 1-month returns.
However, short-term tables rarely tell the full story.
Behind the positive numbers sits a wide gap between stronger and weaker funds. Sector leadership has shifted quickly. Areas that look strong over 1 month often sit near the bottom over 5 years, while some of January’s weaker sectors have been among the strongest over longer periods.
This review covers 4,199 Investment Association (IA) sector classified funds across 55 sectors. Returns are shown as % growth to the end of January 2026 across multiple periods. Sector averages and rankings are taken directly from the data provided.
The findings highlight a simple point: reacting to recent performance without looking at longer-term context can lead to poor decision making.
Recent Performance Overview: Most Funds Delivered Gains
Across the full universe of funds analysed:
| Time Horizon | Number of Sector Classified Funds | Median Return (%) | Funds with Positive Returns (%) |
|---|---|---|---|
| 1 month | 4,196 | 1.44 | 79.8 |
| 3 months | 4,198 | 1.38 | 69.1 |
| 6 months | 4,198 | 6.41 | 93.2 |
| 1 year | 4,199 | 9.18 | 85.9 |
| 3 years | 3,892 | 24.65 | 94.9 |
| 5 years | 3,553 | 27.94 | 86.5 |
Figures up to 28th January 2026
Based on the data shown above, nearly 80% of the funds analysed delivered positive growth over the 1-month period, while more than 93% recorded gains over 6 months.
At first glance, that might suggest a broadly rising market. But the range of outcomes tells a different story.
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Over 1 month, returns ranged from -10.45% to +27.82%.
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Over 5 years, returns ranged from -98.30% to +388.75%.
Two investors in the same sector could have experienced very different results depending on which fund they held.
The Strongest And Weakest Sectors Over 1 Month
Using sector averages to the end of January 2026, the strongest and weakest sectors over 1 month were:
| Group Rank | Sector | Sector Avg (1m, %) | Funds in Sector | Spread Inside Sector (%) |
|---|---|---|---|---|
| Top | IA Latin America | 13.02 | 7 | 2.85 |
| Top | IA Commodity/Natural Resources | 10.84 | 33 | 15.00 |
| Top | IA Global Emerging Markets | 7.42 | 176 | 5.74 |
| Top | IA Asia Pacific Excluding Japan | 6.40 | 107 | 7.64 |
| Top | IA UK Smaller Companies | 5.92 | 44 | 4.71 |
| Bottom | IA India/Indian Subcontinent | -8.12 | 24 | 2.86 |
| Bottom | IA USD Mixed Bond | -1.15 | 25 | 1.18 |
| Bottom | IA USD Corporate Bond | -1.11 | 30 | 0.60 |
| Bottom | IA USD Government Bond | -1.11 | 34 | 1.66 |
| Bottom | IA Financials and Financial Innovation | -1.00 | 13 | 9.65 |
Figures up to 28th January 2026
IA Latin America and IA Commodity/Natural Resources were among the strongest sectors January 2026. The IA India/Indian Subcontinent was a clear underperformer during this period with average returns of -8.12%.
But the more important point is not simply which sector led. It is how widely results differed inside some of those sectors.
In IA Commodity/Natural Resources, the difference between stronger and weaker performing funds within the sector was 15%. In IA Financials and Financial Innovation, it was 9.65%.
Simply being invested in a sector that has a strong performance average did not guarantee strong outcomes.
Where Short-Term Strength Clashes With Long-Term Results
One of the clearest insights from the data is how quickly rankings can change.
Sectors that ranked relatively well over 1 month but sit near the bottom over 5 years:
- IA China/Greater China: 9th over 1 month, 54th over 5 years
- IA UK Index Linked Gilts: 25th over 1 month, 55th over 5 years
- IA UK Gilts: 37th over 1 month, 53rd over 5 years
Sectors that were weak over 1 month but strong over 5 years:
- IA Financials and Financial Innovation: 51st over 1 month, 1st over 5 years
- IA North America: 47th over 1 month, 3rd over 5 years
- IA India/Indian Subcontinent: 55th over 1 month, 13th over 5 years
If decisions are based only on the latest table, there is a risk of allocating capital to sectors that have just risen sharply while reducing exposure to areas that have delivered stronger long-term growth.
Short-term tables can give a very different impression compared with 5-year results.
Why Dispersion Increases Decision Risk
Some sectors show tight groupings of returns. Others show wide gaps between stronger and weaker funds.
The largest spreads inside sectors over 1 month were:
- IA Commodity/Natural Resources: 15.00%
- IA Specialist: 11.97%
- IA Financials and Financial Innovation: 9.65%
- IA Technology and Technology Innovation: 8.97%
In these areas, fund choice had a meaningful impact on outcomes. Two funds in the same sector could have produced noticeably different results in a single month.
Where spreads are wide, switching funds based purely on short-term rankings carries additional risk.
What This Means For Investors
The data to the end of January 2026 shows:
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Most funds delivered gains over shorter periods.
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Sector leadership changed quickly.
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Returns varied widely within several sectors.
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Short-term rankings often differ from 5-year rankings.
Performance tables are useful for information. However, they do not provide context around consistency, portfolio balance or long-term positioning.
Reviewing Your Portfolio Context
Looking at recent performance in isolation can encourage reactive decisions.
A structured portfolio analysis looks at:
- How each holding has performed against its sector average
- Whether recent changes have increased concentration in particular regions or sectors
- How short-term results compare with longer-term outcomes
- Whether the portfolio structure remains aligned with its intended level of risk
Yodelar’s portfolio analysis uses objective sector and fund data to assess performance and structure. It is designed to provide clarity on how a portfolio has behaved over time and whether the selected funds have delivered competitive results relative to their sectors.
Conclusion
January 2026 saw gains across most funds over the shorter periods analysed. However, performance differences between funds remain wide, and sector rankings have shifted quickly within a short space of time.
The data reinforces that short term momentum does not always translate into sustained results. Making changes based solely on recent returns, without considering longer term evidence and overall portfolio structure, can unintentionally increase risk exposure.
Careful fund selection, genuine diversification and consistent, evidence led reviews remain central to improving long term outcomes. If you are uncertain about how well your portfolio is constructed or how competitively it has performed, you can book a no obligation call with a member of our advice team to review it in more detail.
