- The GAM Sustainable Emerging Equity fund is the best performing fund 2024 so far with growth of 30.13%
- 5 of the 10 top performing funds in 2024 are classified within the IA Technology & Technology Innovation sector
- The Xtrackers MSCI USA Information Technology ETF has not only delivered some of the best growth of 2024 but it is also one of the lowest priced funds on the market
- With 2 funds featured in the list of the 10 top-performing funds, Polar Capital has demonstrated its management expertise in identifying high-quality technology-oriented companies.
The investment landscape witnessed a positive resurgence across most sectors in 2023, following a challenging 2022 marked by valuation declines across numerous core markets. In the first half of 2024, markets have continued to demonstrate resilience, and despite periods of volatility, all core markets have delivered positive returns.
In this article, we will identify the top performing funds so far in 2024. We identify the best funds across popular sectors in the first half of 2024, including technology, UK equities, Asian equities, North American equities, European equities, and Global Emerging Markets.
Best Performing Funds of 2024
Our comprehensive analysis encompassed the performance, sector ranking, and overall rating of 4,013 funds, enabling us to identify the best funds that have delivered exceptional results in the first half of 2024. The 10 funds featured below represent some of the top growth funds across all sectors this year.
Notably, 5 of the 10 funds belong to the IA Technology & Technology Innovation sector, underscoring the continued strong growth trend for tech funds after a challenging 2022. With 2 funds featured in the list of the 10 top-performing funds, Polar Capital has demonstrated its management expertise in identifying high-quality technology-oriented companies.
The inclusion of multiple technology funds in the top performers list reflects the sector's resilience and the ongoing demand for innovative solutions, positioning these funds as compelling growth opportunities for investors.
Best European Equity Funds
Europe faced significant headwinds in 2022, severely impacted by the repercussions of the Russian invasion of Ukraine. However, as we move into 2024, this resilience and positive momentum are evident in the performance metrics of European equity funds. The sector has averaged a 13.5% return over the first six months, indicating sustained growth and recovery.
In our analysis of the 10 best-performing funds in the Europe ex UK equity sector, the Artemis SmartGARP European Equity fund stands out as the number one top performer over the last 6 months, 1 year, and 3 years. Over the past six months, this fund achieved impressive growth of 20.97%, ranking it 1st among 135 funds. Its performance over a one-year period was equally commendable, with growth of 30.81%, maintaining its top position. Notably, it continued to rank as the top performing fund in the sector over a three year period with growth of 43.76%. The fund's consistent outperformance illustrates its ability to adeptly navigate a highly competitive and volatile market environment, solidifying its reputation as one of the best funds in 2024 in European equity.
The lowest priced European Equity fund featured in our table was the HSBC Euro Stoxx 50X fund with an annual charge of just 0.05%. This fund is a passive investment, hence its low charge. It is designed to replicate the performance of the Euro Stoxx 50 Index, which comprises 50 of the largest and most liquid blue-chip companies in the Eurozone. In contrast, the most expensive top performing European equity fund was the Waverton European Dividend Growth fund with a 1.21% annual charge.
The fund's high charge is a consequence of its small size, with just £62.8 million of client assets under management. Despite the Waverton European Dividend fund's strong performance, the combination of its small size and high charges may reduce its appeal with investors compared to other top performing funds within the sector.
Best UK Equity Funds in 2024
In 2023, UK equities averaged returns of 7.38% as towards the end of the year it began its long awaited recovery from a sustained period of poor returns. In the first half of 2024, the UK Equity market continued on a positive upward trajectory with the UK All Companies sector averaging growth of 14.02%, which was higher than the Global equity market for the first time in several years.
The 10 UK equity funds featured in the above table not only ranked among the best in the sector this year but each has consistently outperformed the sector average over the past 1, 3 & 5 years.
The Artemis UK Select was the highest growth fund featured in the above table with very strong returns of 23.94% in the first half of 2024. The fund was also the number 1 ranked fund in the sector over 5 years with returns of 84.54%.
Closely following the Artemis UK Select fund was the high quality Ninety One UK Special Situations fund. The fund currently manages £460 million of client money, which although significant is well below the £2.44 billion entrusted to the Artemis UK Select fund.
The best UK Equity fund with the lowest charges was the Invesco UK Enhanced Index fund which has an annual charge of just 0.23%. This fund is a popular KK equity fund currently managing almost £1 billion of client assets, and as demonstrated in the table above it has consistently been one of the best performing UK Equity funds.
Best Asian Equity Funds
The Asia Pacific ex-Japan sector includes the economic region of Asian countries, excluding Japan. These countries are often regarded as emerging markets and are usually best suited for investors with a higher risk tolerance and searching for high-growth investment prospects. The sector has had a comparatively stable year with an average return of 9.6% from its 112 funds over the last six months.
The Jupiter Merian Asia Pacific fund was among the top performing Asian equity funds this year with returns of 16.03%, which was well above the sector average of 9.6%. Over the 4 other periods analysed this fund maintained its strong performance as it consistently outperformed more than three quarters of competing same sector funds.
Best North American Equity Funds
The North American equity sector represents an integral allocation for most growth-oriented portfolios. Companies listed across the US and Canadian markets account for a meaningful share of global market capitalisation.
Over the past 5 years, the sector has delivered an average return over 80.82% - the 2nd highest of all 56 IA sectors. With some 191 funds in the sector with 5 year performance the North American sector is among the most competitive. However, there is significant dispersion between the top and bottom performing funds with only a comparatively small selection of funds consistently outperforming the sector average.
Over the past six months, the GQG Partners U.S. Equity fund was the highest growth North American equity fund featured in the above table with growth of 25.51%. Since the fund's inception in February 2021 it has consistently outperformed 95% of competing funds and combined with comparatively low annual charges of 0.55% this fund is fast becoming a popular option with investors, amassing funds under management of £1.1 billion in just over 3 years.
Another top performer was the Xtrackers MSCI USA Information Technology ETF, which has consistently delivered exceptional returns. Over the past 6 months the fund outperformed 95% of all other North American sector funds and over the past 5 years it was the number 1 fund with exceptional returns of 204.9%. In addition to the fund's exceptional returns is the added benefit of very low annual charges of just 0.12%, which is also one of the lowest in the entire sector.
Best Global Emerging Market Funds
The term “emerging equities” refers to the listed shares of companies based in emerging-market countries. In general, emerging-market countries are regarded as having rapidly growing economies that show greater potential returns but higher risk than developed markets.
Investing in emerging markets is typically reserved for higher risk investment portfolios but it is not uncommon for mid-range portfolio's to include a small proportion of holdings in emerging market funds due to the growth potential they provide.
The higher risk nature of the sector was exposed in 2022 when the sector averaged negative growth of -12.21%. 2023 started off poorly for the sector but it eventually rallied in the final quarter of the year to average annual growth of 4.31%. Since the start of 2024 the sector has done much better with volatility subsiding as the sector averaged 10.28% growth up to the start of June 2024. However, a number of funds significantly outperformed this average.
The top growth fund in the Global Emerging Markets sector this year has been the GAM Sustainable Emerging Equity fund with exceptional returns of 30.13%. This fund focuses on buying quality stocks at cheap valuations which is a strategy that has consistently resulted in excellent returns. However, the funds relatively high annual charge and low fund size (£31 million) has stunted the funds overall attraction.
Another top quality fund featured in the above table was the Invesco FTSE RAFI Emerging Markets ETF. This popular ETF is based on the FTSE RAFI Emerging Index (Index) and has amassed substantial funds under management of £919 million. The funds low annual charge of 0.49% adds to its appeal alongside its consistently strong returns. Over the past 6 months, 1 year, 3 year and 5 years the fund has returned growth of 14.61%, 15.90%, 21.74% and 42.64% respectively.
Best Global Equity Funds
The Global sector is the most popular sector with £196 billion of assets under the management of the 500 plus funds in the sector. The sector is expanding rapidly with numerous new fund options entering the market place. In just 5 years the number of funds in the sector has grown by 37%.
To qualify for the Global sector, funds must invest a minimum 80% in equities globally while maintaining diversification across regions. Popular picks like Fundsmith Equity and Lindsell Train Global Equity reside here rather than in North America, despite large US tilts.
As identified in the above table, the best Global funds in 2024 have also consistently been some of the best funds for several years.
The iShares Edge MSCI World Momentum Factor ETF was the top performing Global fund featured above. This ETF is designed to track the performance of the MSCI World Momentum Index, which consists of companies with persistent price momentum and high price appreciation over the medium-term. It not only has an exceptional performance history but it is also one of the lowest priced Global fund options available.
Top Performing Technology Funds
Amidst a highly fluctuating 2022, numerous investors chose to sell shares from technology companies in favour of more stable and less volatile value-oriented funds. Concerns of overvaluation and a possible decline in technology fund performance served as the driving forces behind this shift. However, the market has rapidly changed and a lot of those investors are now missing out on the huge recovery and bull run that technology funds have experienced in recent months.
Within the IA Technology & Technology Innovation sector, technology-focused funds emerged as top performers in 2023 and have maintained their strong momentum into 2024. The remarkable recovery and robust performance of these funds in 2023, significantly outpacing other equity markets, were underpinned by the accelerating digital transformation and continuous advancements in technology, particularly in the field of artificial intelligence (AI).
Among the top performing Technology funds is the Liontrust Global Technology fund, which has delivered exceptional returns for investors over the short and long-term. The fund has returned growth over the past 6 months, 1 year, 3 year and 5 years of 27.10%, 42.99%, 57.27% and 136.59% respectively.
This level of outperformance indicates that the fund’s managers have demonstrated a skilled approach to navigating the rapidly evolving technology landscape. Their stock selection capabilities and ability to identify emerging market leaders has paid off handsomely for investors.
While the technology sector is known for its volatility, the fund's outstanding risk-adjusted returns reveal a disciplined investment process focused on long-term growth rather than chasing short-term momentum plays.
The iShares S&P 500 Information Technology Sector has also been one the sector's stand out performers. The fund has returned competitive returns so far this year of 22.47%, but over the past 3 and 5 years it ranked 1st in the sector with exceptional growth of 88.07% and 223.14%. This hugely popular fund manages in excess of £5.5 billion making it one of the largest funds in the entire market. The funds is a passively managed fund which aims to deliver returns which reflects the S&P 500 Capped 35/20 Information Technology Index. As a passive fund, it has low management charges of just 0.15% which combined with its exceptional performance record makes this fund one of the most attractive in the sector.
Sector Performance Overview
The chart below shows the 10 year average performance for each of the 7 sectors featured in this article.
Understanding Fund Performance
We define a top performing fund as one that consistently performs better than 75% of same sector funds (i.e. top 25%), yet the reality is that many portfolios on the market include funds that perform significantly below this percentage, with funds often ranking in the bottom 25%.
With more than 100 different fund management brands in the UK offering access to thousands of funds it can be a challenging task to find the best options. To add further complexity, new funds enter the marketplace each month adding to the thousands of funds that are already available.
Consistency is an important indicator of quality and success, and it is integral to our portfolio management philosophy. We believe consistency displayed by investment funds that maintain a high sector ranking over continuous periods reflects efficiency and expertise from the fund manager through their ability to deliver competitive returns for their clients over both the short and long term.
In the short-term with changing political and economic markets it is unrealistic for even the best fund managers to continuously maintain a level of performance from their funds that exceeds that of the majority of their peers. But analysing performance over a 1, 3 & 5 year period will take into account differing investment cycles and will help to identify the funds and fund managers that specialise and excel in a particular market.
The funds that consistently rank highly in their sectors can reflect a level of expertise from the manager within that investment sector. Whereas, the fund managers whose funds continually rank lowly within their sector have demonstrated a lack of quality and an inability to deliver competitive returns for investors.
Evaluate Your Fund Performance
Evaluating fund performance is a crucial metric for investors and reputable advisory firms. Understanding how your funds are performing will help to identify if you are entrusting your money to fund managers who are delivering competitive returns. While past performance does not guarantee future results, research shows that fund managers who have consistently outperformed their peers across various time horizons are more likely to do so going forward than those with a history of underperformance.
There are 3 key benefits of understanding fund performance
Past Performance
Past performance is not an indicator of future returns, but when asked, investors would prefer to invest with fund managers that consistently perform, over varying time frames, in the top 25% of performers in their sectors versus fund managers that perform in the worst 25% of performers.
Comparative Performance
Each fund’s performance can be compared alongside all other competing funds that are classified within the same sectors. How each fund compares over the medium to long term can identify the quality of the fund and the competence of the fund manager.
Fund manager accountability
Past performance exposes the effectiveness of funds and their fund managers. The funds that consistently rank highly in their sectors can reflect a level of expertise from the manager within that investment sector. Whereas, the fund managers whose funds continually rank low within their sector demonstrate a lack of quality and an inability to deliver competitive returns for investors.
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