THE fund performance tables for last year reinforce the point that picking the right sector to be in makes a huge difference to your investment return.

Choose the top-performing sector – Asia Pacific (excluding Japan) – and you would have enjoyed an average return of 36.3 per cent. Pick the sector with the worst showing – Japanese Smaller Companies – and you would have lost 18 per cent of your money.

Leaving aside Japan, it was Asia, Europe and emerging markets that were the places to be last year. Emerging markets funds produced almost as good a performance as Asia Pacific, with a return of 34.8 per cent, while European funds returned about 12 per cent. No other sector managed to achieve double figures.

There were some sobering statistics for investors in UK funds. The all-companies sector, which covers a large number of the funds investing in UK shares and holds tens of billions of pounds of investors’ money, produced a figure of only 1.7 per cent. Investors would have been better off in a deposit account.

The Equity Income sector, which is also very popular and is normally a very solid performer, produced an even worse result, losing 1.7 per cent.

There was little cheer for bond funds either. The mainstream and riskier corporate bond sectors both recorded losses. Global Bonds returned a modest 4.1 per cent and the only real bright spot was UK index-linked gilts, which produced a 7.3 per cent return.

With US funds up only 4.4 per cent and mainstream Japan funds losing 11.1 per cent, it was not a great year for funds investing in the developed world. If you didn’t have a sprinkling of Asian and emerging markets funds in your portfolio, you would have struggled to produce a decent return.