- The Best Funds report was compiled from an analysis of 3,983 Investment Association sector classified funds. The analysis found that 679 (17%) achieved a 4 or 5 star performance rating.
- In contrast, 2,473 funds delivered consistently poor returns, receiving only a 1 or 2-star rating. The remaining 830 funds achieved a modest 3-star rating.
- The IA North America sector had the highest average sector growth over the past 12 months (15.05%).
- The technology sector delivered the highest five year average return of 105.05%.
- Over the past year the Quilter Investors Precious Metals Equity U2 Acc fund returned growth of 60.90%, which was the highest growth of all 4 and 5 star funds.
An analysis of 3,983 Investment Association sector-classified funds found that only 679 achieved a 4 or 5-star performance rating, while more than 60% consistently underperformed their sector average. Identifying funds that deliver sustained outperformance remains a challenge for both investors and advisers.
In this article and the free full report, we identify all consistently top-performing funds across key sectors, focusing on those that have maintained a top-quartile ranking over multiple periods. With thousands of investment options available, selecting funds with a strong and repeatable track record is essential. By highlighting those that have demonstrated consistent outperformance, this report provides investors with valuable insights to support informed decision-making and enhance portfolio returns.
Best Performing Funds
We conducted a comprehensive analysis of 3,983 funds classified within the Investment Association investment sectors, evaluating their performance, sector ranking, and overall rating. This in-depth review enabled us to identify the best-performing funds that have consistently outperformed their peers over the past 1, 3 & 5 years.
How Yodelar Rates Fund Performance
Our analysis identified that 680 funds earned a top 4 or 5 star rating, showcasing strong performance. In contrast, 2,473 funds delivered consistently poor returns, receiving only a 1 or 2-star rating. The remaining 830 funds achieved a modest 3-star rating.
Top Performing Technology Funds
Over the past five years, the technology sector has averaged the highest growth of all 56 Investment Association (IA) sectors, delivering an average return of 105.05%.
Of the 10 top technology funds featured in the table above, five achieved a 4 or 5 star rating, consistently outperforming their sector. The other five secured 3 star ratings but still ranked among the top 50% of the sector for performance.
The SPDR S&P US Communication Services Select Sector ETF led the sector over the past year with 30.26% growth, though its longer-term performance was more modest. In contrast, the iShares S&P 500 Information Technology Sector ETF has been a consistent top performer, returning 21.27% over one year, and ranking 1st in its sector over three and five years with returns of 79.97% and 189.59%. Managing over £8.53 billion, this low-cost passive fund (0.15% fee) tracks the S&P 500 Capped 35/20 Information Technology Index, making it a popular choice for tech exposure.
Another standout, the L&G Global Technology Index Trust I Acc, delivered 20.89% over one year and 72.61% and 177.98% over three and five years, respectively. Tracking the FTSE World Index, it provides broad exposure to developed and emerging market technology firms, offering strong long-term growth potential.
Best Performing Global Equity Funds
The IA Global is the largest sector, managing around £228 billion, which accounts for 30% of all equity fund assets.
The ten Global Equity funds listed in the table above ranked among the top performers in their sector last year and have consistently delivered returns above the sector average over 1, 3, and 5 years. Each fund has been awarded a five-star rating based on its overall performance.
The Invesco Global Ex UK Core Equity Index (UK) achieved the highest returns among the highlighted funds, delivering 21.68% over 1 year, 63.70% over 3 years, and 119.14% over 5 years. The fund targets long-term capital growth, investing at least 80% of its assets in global equities, excluding the UK. Its consistent performance reflects the effectiveness of its strategy and management. However, its relatively high annual charge and small fund size (£54.22 million) may limit its appeal despite strong past performance.
The Fidelity Index World attracted £2.5 billion in new investments in 2024, making it the most-bought global fund of the year as investors sought broad global exposure. It has maintained a strong performance over 1, 3, and 5 years, positioning it as a key option for investors looking for global equity exposure.
Best Global Emerging Markets Funds
Investing in emerging markets is generally considered suitable for higher-risk portfolios. Even mid-range portfolios sometimes have a small share of these investments to take advantage of the growth potential. They typically offer higher potential returns than developed markets, but with increased risks, such as political instability, currency fluctuations, and weaker regulatory systems.
The sector has experienced mixed performance in recent years. After a tough 2022 with a -12.21% average return, 2023 saw improvement, with the sector ending the year at 4.31% growth. In 2024, volatility decreased, and the sector achieved an average growth of 9.55%. However, several funds significantly outperformed this average.
Goldman Sachs recently raised its 12-month target for the MSCI Emerging Markets Index by 3%, expecting an 11% gain. This positive outlook is driven by the influence of artificial intelligence on Chinese stocks, which could also help other emerging markets.
The table above highlights the best Global Emerging Markets funds over the past 1, 3, and 5 years. Each of these funds was awarded a top 4 or 5-star rating for their consistent performance.
One of the top growth funds in the Global Emerging Markets sector over the past year was the Ninety One Emerging Markets I Acc fund, with impressive returns of 20.55%. This fund primarily invests in high-quality, attractively valued emerging market companies, and its strategy has produced excellent results. The fund's high charge is a consequence of its small size, managing just £20.78 million in client assets.
Best North American Equity Funds
North American equity funds mainly invest in shares of companies based in the United States and Canada. This sector offers access to some of the world's largest and most influential markets.
Over the past 5 years, the sector has delivered an average return over 90.99% - the 2nd highest of all 56 IA sectors. With around 194 funds in the sector with 5 year performance, the North American sector is one of the most competitive. However, there is a significant gap between the top and bottom performers, with only a relatively small number of funds consistently beating the sector average.
As identified in the above table, these top North American Equity funds have also consistently been some of the best funds over the past 1, 3 and 5 years.
Among the top performing North American funds is the T. Rowe Price US Large Cap Growth Equity C Acc, which has produced 22.13% returns over the past year. It has also delivered substantial growth of 65.64% over three years and an impressive 121.85% over five years. The fund usually holds 60 to 75 stocks, focusing on businesses with sustainable, double-digit earnings and robust cash flow growth. This smart approach has helped it stand out among investors, with the fund managing assets worth £130.11 million.
Best UK Equity Funds
In 2023, UK equities posted average returns of 7.38%, marking the start of a long-awaited recovery after a prolonged period of underperformance. The upward trend continued in 2024, and over the past year the UK All Companies sector has averaged growth of 12.55%, which outpaced the global equity market for the first time in years.
As identified in the above table, these UK equity funds have been among the best in the region for several years. Each fund has consistently outperformed the sector average and earned a top 5 star Yodelar performance rating.
The top growth fund in the UK Equity Market over the past year has been the Artemis UK Select fund with exceptional returns of 33.15% which ranked 1st out of 216 funds in the UK All Companies sector. The fund also maintained its top spot over 5 years, with remarkable returns of 95.06%.
The Ninety One UK Special Situations fund closely trailed the Artemis UK Select fund and was ranked among the top-performing UK equity funds over the past 1, 3, and 5 years. It was the number 1 fund in the sector over 3 years, with returns of 57.61%. This fund currently manages £467 million of client assets. While this is a significant amount, it is still well below the £3.13 billion managed by the Artemis UK Select fund.
Another top quality fund featured in the above table is the Royal London UK Core Equity Tilt Z Acc. It stands out for its low annual charge of just 0.10%. The fund manages nearly £5.17 billion in client assets and consistently ranked among the best UK equity funds. Its affordable fees and solid performance made it a favourite among investors.
Best European Equity Funds
In 2022, European markets struggled due to high inflation and an energy crisis triggered by the Russian invasion of Ukraine. However, by 2024, European equity funds showed strong recovery and resilience, with the sector averaging an 8.12% return over the past 12 months.
The above table features 10 of the best performing funds in the Europe ex UK equity sector. The Artemis SmartGARP European Equity emerged as the top performer over the past 12 months. The fund achieved growth of 23.40%, ranking 1st among 125 funds. Its 3 and 5 year performance was equally notable, with returns of 60.03% and 82.27%, respectively.
With £368.37 million in assets, the fund’s consistent outperformance underscores its ability to manage a competitive and volatile market effectively. This success reinforces its status as a top European equity fund.
Another standout performer is the Waverton European Dividend Growth L fund, which has consistently generated remarkable returns. It ranked 2nd in the sector over the past year and claimed the 1st position over three years, with 60.74% growth. Despite this reliable performance, its smaller size and higher charges may reduce its appeal to investors compared to other top funds in the sector.
Best Asian Equity Funds
The Asia Pacific ex-Japan equity markets have faced headwinds in recent years. After initial setbacks during the COVID-19 pandemic, the markets gradually recovered in 2021, culminating in a strong rebound in 2024. The region displayed strength and growth potential, supported by gains in the technology and consumer goods sectors.
This sector represents the economic region of Asian countries, excluding Japan, and is often considered an emerging market region. It is typically suited to higher-risk investors looking for high-growth opportunities. The sector has shown stability over the 2024 year and delivered an average return of 12.3% across its 110 funds.
The 10 funds listed below have consistently been among the best Asian equity funds over the past 1, 3, and 5-year periods.
Over the past year, the Man Asia (ex Japan) Equity Professional was the highest growth fund with returns of 23.94%, well above the sector average of 12.3%. Since its inception in 2020, the fund has consistently outperformed 95% of other funds in the sector.
The M&G Asian I Acc fund has also proven to be one of the top performers in the Asia Pacific ex-Japan sector. Over the past 12 months, it recorded growth of 2.83%, and over three years, it achieved an impressive return of 31.42%, securing the 1st position in its category. The fund has demonstrated consistent performance over the years, beating the sector average, and has accumulated £522 million in funds under management.
Sector Performance Overview
The chart below shows the 10 year average performance for each of the 7 sectors featured in this report.
Understanding Fund Performance: The Key to Successful Investing
We define a top-performing fund as one that consistently ranks in the top 25% of its sector, outperforming 75% of its peers. However, the reality is that many investment portfolios still include funds that underperform, often ranking in the bottom 25% of their sector.
With over 100 fund management brands in the UK offering access to thousands of funds, we recognise that finding the best options can be a challenging task. The marketplace is constantly evolving, with new funds entering each month and adding to the already vast selection.
Consistency is a key indicator of quality and success, forming an integral part of our portfolio management philosophy. We believe that investment funds demonstrating consistent performance and maintaining a high sector ranking over continuous periods reflect the efficiency and expertise of their fund managers. This is evident in their ability to deliver competitive returns for clients in both the short and long term.
In the short term, with volatile political and economic markets, it is unrealistic to expect even the best fund managers to continuously outperform the majority of their peers. However, evaluating performance over 1, 3, and 5-year periods can provide a clearer picture, accounting for different investment cycles. This approach helps to identify funds and fund managers that specialise and excel in a particular market.
The funds that consistently achieve high rankings within their sectors often showcase the manager's expertise in that particular investment area. In contrast, fund managers whose funds repeatedly perform poorly within their sector have displayed a lack of quality and an inability to generate competitive returns for investors.
Assessing Your Fund’s Performance
Evaluating fund performance is an essential practice for investors and trusted advisory firms. Understanding how your investments are performing helps you determine whether your money is in the hands of fund managers who are delivering strong returns. While past performance cannot predict future results, research suggests that fund managers with a history of consistent outperformance are more likely to continue this trend than those with a record of underperformance.
Key Benefits of Monitoring Fund Performance
1. Past Performance
Although past performance is not a definitive indicator of future returns, most investors prefer to place their money with fund managers who consistently rank in the top 25% of performers within their sectors, rather than with those whose performance is among the worst 25%.
2. Comparative Performance
A fund’s performance can be evaluated against all other competing funds within the same sector. Analysing how each fund compares over the medium to long term can help assess the fund’s quality and the competence of the fund manager.
3. Fund Manager Accountability
Past performance highlights the effectiveness of funds and their managers. Funds that consistently rank highly within their sectors reflect a high level of expertise from the manager in that investment sector. Conversely, fund managers whose funds repeatedly rank poorly demonstrate a lack of quality and an inability to deliver competitive returns for investors.
Optimise Your Investments with Yodelar
Investing isn't always straightforward and, for some, it can be stressful and uncomfortable. As an investor, you are constantly exposed to market factors that cause values to rise and fall, which can sometimes lead to emotional decision-making.
However, the most successful investors are often those who maintain a disciplined, pragmatic approach and follow a structured, long-term strategy. By sticking to this methodical approach, you can achieve better investment outcomes.
Book a no-obligation call with one of our advisers today to explore your investment options and discover how we can help you maximise your portfolio returns.
