EDITOR’S NOTE: this article was written before the Philadelphia Stock Exchange Semiconductor index fell as much as 11% on Thursday 5 November. Trustnet will look at the day’s events and impact on funds in a future article.
UK equity funds make up more than a third of the 100 best performers since semiconductor stocks peaked in the summer, as investors moved money out of the AI trade and into less crowded areas of the market, Trustnet research shows.
As investors have grown nervous about the AI revolution, they have sold chip stocks and moved money into parts of the market with steadier earnings and less exposure to AI spending.
The Philadelphia Stock Exchange Semiconductor index dropped 21.3% between 23 June and 2 November, according to FE Analytics. In contrast, the MSCI AC World lost 1.2% over the same period, in US dollars excluding dividends.
The small loss for global equities reflects money moving within the stock market. Over the same period, the MSCI AC World Health Care index made 18.5% and the MSCI World Energy index gained 21.3%.
Price performance of indices since 23 June 2026
Source: FE Analytics. Price return in US dollars between 23 Jun and 2 Nov 2026
Investors started to question the AI trade when the Federal Reserve signalled that interest rates would need to rise to tackle above-target inflation. Concerns about when AI spending would pay off, how it is being financed and the high valuations of AI-linked stocks led many to sell crowded chip stocks in favour of sectors with steadier earnings.
But events outside the AI trade also moved markets. The conflict with Iran pushed oil prices higher, which helped energy companies and added to the inflation pressures behind the Fed’s decision.
Although the sell-off has hurt many investors, some funds have made strong gains since 23 June.
Source: Finxl. Total return in sterling between 23 Jun and 2 Nov 2026
Trustnet looked across the 100 top-performing funds in the Investment Association universe for themes. The table above shows the 25 best performers over the period.
Although the table is dominated by energy and healthcare funds, UK equity funds are the most common of the wider list, accounting for 36 of the 100 best performers.
Unicorn Outstanding British Companies is the only one in the table, but the list includes well-known names such as WS Lindsell Train UK Equity, Liontrust Special Situations, Artemis UK Smaller Companies, Fidelity UK Smaller Companies and Schroder UK Mid 250.
Almost all are actively managed: L&G UK Mid Cap Index is the only tracker fund among the 36. Many invest in small- and mid-sized companies, which earn more of their revenue in the UK and have little exposure to the AI hardware or Asian supply chains that investors are currently worried about.
UK smaller companies started 2026 on low valuations after years of being out of favour with investors. However, given that UK equities and small-caps have failed to keep up with surging mega-cap tech stocks, this part of the market has attracted investors looking to diversify into cheaper names.
Healthcare is the second most common theme, with 22 funds among the 100 best performers and six in the table, including iShares S&P 500 Health Care Sector UCITS ETF, Xtrackers MSCI USA Health Care UCITS ETF and L&G Healthcare Technology & Innovation UCITS ETF. AXA Framlington Health, T. Rowe Price Health Sciences Equity, Fidelity Global Healthcare and Schroder Global Healthcare are among those further down.
Healthcare appeals to investors in this kind of market because demand for medicines and treatment depends less on the economic cycle than technology spending does. The MSCI AC World Health Care index reached a record high in October, with large pharmaceutical companies, insurers and healthcare services leading the gains.
In a similar vein, funds that focus on high-quality companies with strong brands and steady earnings have done well. Lindsell Train Japanese Equity, Seilern America and Lazard Global Equity Franchise are all in the table, while Seilern World Growth and IFSL Evenlode Global Income are among the 100 best performers.
Managers of these funds tend to avoid capital-heavy businesses such as chipmakers and often hold consumer staples companies, which have been in demand of late. The MSCI AC World Consumer Staples index gained 10.9% (in sterling terms) in October, while the Nasdaq 100 was down 3.3%.
Value funds have also benefited. Although none are in the 25 best performers, seven are among the top 100, including WisdomTree US Value UCITS ETF, WisdomTree Global Value UCITS ETF, Natixis Harris Oakmark US Value Equity and Brown Advisory Global Value Select. These funds hold fewer of the expensive technology stocks that have fallen.
Meanwhile, three financials funds are in the top 100: Wellington FinTech, Polar Capital Global Insurance and Amundi Euro Stoxx Banks. Higher interest rates tend to support bank earnings.
Oil and gas funds are well-represented in the table above, accounting for nine of the 25 best performers, including Guinness Global Energy, BlackRock BGF World Energy, iShares S&P 500 Energy Sector UCITS ETF and State Street SPDR MSCI Europe Energy UCITS ETF. Across the top 100, there are 16 energy and commodity funds.
Oil companies have gained from the US conflict with Iran and the closure of the Strait of Hormuz, which carried around a fifth of the world’s oil supply before the war. Brent crude passed $100 a barrel on 23 July. It stood at $104.77 on 2 November and has only recently dropped below $100 on hopes of a US–Iran deal.
The gains for oil and gas funds stand in contrast to clean energy funds, which feature heavily among the worst performers over the same period as higher interest rates hit the sector.
The most direct link to the AI sell-off is in technology itself. WisdomTree Cloud Computing UCITS ETF and WisdomTree Cybersecurity UCITS ETF are the two best-performing funds of the period, with Invesco Cybersecurity UCITS ETF also in the table and three more software ETFs further down the list.
Software companies buy AI computing power rather than build the chips and datacentres behind it, so concerns about AI spending have hit them less. Software stocks had also fallen sharply earlier in the year, when investors feared AI would replace a wide range of enterprise software companies, although those fears have since eased.