Energy and natural resource funds provided the best returns in 2022, according to financial analysts Morningstar and Trustnet.

While the FTSE 100 ended the year less than 100 points above its opening level, according to Morningstar (morningstar.co.uk) the best performer in the energy sector, BlackRock Global Funds World Energy, was up 57 per cent over the year.

The dominance of the sector is a repeat of 2021, says Ben Yearsley at Shore Financial Planning.

“It is very unusual to see the same sector reaching top spot in consecutive years, but energy funds have achieved it in 2021 and 2022.

This is in part due to the rebound from depths the sector reached during Covid, but also Russia invading Ukraine, and the lack of investment in new carbon-based projects leading to high oil and gas prices has been a factor. I’m not sure these same funds will make it to the top for in 2023, but the outlook for energy companies is still good.”

Trustnet’s (trustnet.com) analysis also put funds investing in Turkey in two of its top ten spots. The iShares MSCI Turkey UCITS ETF was its best-performing fund of 2022, with gains of 113.7 per cent, followed by the HSBC MSCI Turkey ETF at 113 per cent.

It attributed the gains to Turkish citizens investing in the stock market last year to escape rampant inflation. Inflation in Turkey rose from 48.7 per cent in January 2022 to a peak of 85.5 per cent in October, after interest rates were cut from 14 per cent to 9 per cent.

However, analysts are less convinced this growth will continue into 2023, with analysts at Schroders saying: “The combination of unorthodox economic policy and rising uncertainty ahead of next year’s general elections mean the market’s current trajectory seems unsustainable. We have become outright negative in our outlook.”

Looking ahead to 2023, investment managers Hargreaves Lansdown (hl.co.uk) has five funds to watch. Pyrford Global Total Return; Schroder Managed Balanced; M&G Global Macro Bond; Jupiter Income and Legal & General International Index, a spread of funds covering areas from global index tracking to dividend focused shares to bonds.

The number of first-time buyers fell by 11 per cent in 2022 compared to 2021, according to new figures from Halifax, but still stands above pre-pandemic levels.

Kim Kinnaird, mortgages director at Halifax, said: “Over 362,000 people got on the property ladder in 2022, with first-time buyers now accounting for over half of all home loans.

"Today, getting your own place for the first time will likely mean paying over £300,000 for that new home, and putting down, on average, a £62,000 deposit.”

The high cost of property, some 7.6 times the average UK salary, means the average age of a first-time buyer is now 32, two years older than a decade ago and joint first-time buyers account for almost two-thirds of all applications.