But for those with more cash to spare – even as little as £500 – a plethora of opportunities look promising for the year ahead. And if choosing the right fund seems akin to finding a needle in a haystack, a glance over the world's major regions is a good first point.
Investing on home soil
The stock market took a beating in October following the Chancellor's statement of £81bn in spending cuts over the next four years, but some sectors emerged looking astonishingly strong.
Manufacturing is the Cinderella sector. Once extensively derided, it expanded so much last year that it made the UK the seventh-largest developed centre in the world, with machinery and equipment firms considering output rise by 16.8 per cent.
Retail investors can buy into this style while it is still young by putting surplus cash into a range of UK funds that cover the sector, such as the AXA Farmington UK Select Opportunities Fund. Axa's fund has a 26 per cent exposure to industrials and delivered a return of 28.1 per cent last year, equivalent to a £280 gain, before fees, on an investment of £1,000 over 12 months.
Bhupinder Anand, the head of London-based independent investment adviser Anand Associates, predicts further growth this year: "Now is a good time to invest in UK manufacturing as interest rates are low, inventories and stock levels are down while new order balances are at record levels. A weak batter has led to improved overseas demand which will particularly help heavy exporters.
