An investment fund that specialises in pub companies has revealed that its returns have risen by 11 per cent over the past year.
The Taverners Trust believes the pub sector will continue to show improvements for investors while markets overseas suffer a downturn.
The fund's manager, Billy Whitbread, believes the sector remains a good defence if the company were to come under pressure.
He had also predicted that pub companies' earnings are set to rise because of good weather over the past two months after two disappointingly wet summers.
The pub industry has helped to push up Taverners Trust's shares by 11 per cent in the year to April 30. This is in contrast to an 11.7 per cent decline in shares in the pub, leisure, entertainment and hotel sector on the stock exchange over the same period.
Chairman Lionel Ross said: "In stock market terms, the sector is at present performing most satisfactorily and the return to favour of well managed companies such as Fuller's and Belhaven is indicative of the greater respect being accorded to the sector.
"There seems every indication that this re-rating may persist because even at the recently improved levels many share prices in the sector still look good value because they had fallen so far.
"Recently reported like-for-like sales and profits are healthily positive and fund managers see the sector as an area of the market where there are reliable prospects of earnings growth.
"There is a chance that even if this summer turns out only a little better than those of the last two years, we may hear further good reports from the trade which should meet with favourable response from the market."
Taverners Trust has highlighted Greene King, Belhaven Brewery, Fuller's and Enterprise Inns as producers of some of the best earnings growth.
Recent investments include SFI Group, Inventive Leisure, Po Na Na and Luminar.