- The IA Technology sector has averaged returns of 33.36% this past year and 111.20% over the past 5 years.
- The Liontrust Global Technology fund was the top ranking fund in the IA Technology sector over the past year with growth returns of 49.11%.
- The 5 top performing North American funds featured in this report have averaged growth of 149.55% over the past 5 years. In comparison, the sector average for the period was 84.90%.
Technology and North American equity funds have seen significant investor demand in recent times, driven by bull market conditions of the past several months in both the technology sector and U.S. equity markets. As UK investors seek exposure to these high growth areas, identifying top-performing funds is critical.
This article identifies some of the top performing Technology and North American equity funds and provides insights into the funds that have demonstrated an ability to generate excellent returns. We also, highlight how many investors who seek to capitalise on the current upward trajectory of these two sectors could be inadvertently assuming much more risk than they ever intended.
The Best Performing North American Funds
The North American equity sector has consistently been one of the top growth markets for investors. Over the past year the sector has averaged returns of 23.69%, recovering a large part of the losses from a highly volatile 2022 where the sector ended the year with negative returns of -9.70%.
There are currently 227 funds classified within the IA North American investment sector, some of which have a wide variation of performance. Below we feature 5 North American funds that have excelled this past year and beyond and represent some of the best investment options available.
JPM US Select Equity Plus
The JPM US Select Equity Plus fund has established itself as one of the standout performers in the highly competitive IA North America sector. The fund takes a high-conviction, concentrated approach to investing in quality U.S. companies with durable growth prospects, which has helped the fund establish a very impressive performance record.
Over the past 1, 3, and 5 year periods it has generated returns of 35.52%, 60.43%, and 128.60% respectively. These gains placed the fund an impressive 24th out of 227, 4th out of 203, and 5th out of 184 funds in its North America peer group for each of those timeframes.
Xtrackers MSCI USA Information Technology ETF
The Xtrackers MSCI USA Information Technology ETF provides targeted exposure to large and mid-cap U.S. technology companies shaping innovations and trends. It aims to replicate the MSCI USA Information Technology Index, focusing on sectors like software, hardware, semiconductors, and IT services.
Although this fund is classified in the North American sector, its performance closely mirrors the technology sector, benefiting from periods of heightened growth but also susceptible to volatility from rapid tech shifts and market dynamics.
Over the past 1, 3 & 5 years this fund has returned exceptional growth of 43.46%, 74.75% and 201.18%, which ranked 5th, 2nd and 1st respectively.
Invesco EQQQ Nasdaq 100 ETF
The Invesco EQQQ Nasdaq-100 ETF is an exchange-traded fund that aims to track the performance of the Nasdaq-100 Index. This index comprises 100 of the largest non-financial companies listed on the Nasdaq stock exchange.
Over the past 5 years this fund has been one of the top North American equity funds ranking 2nd out of 184 funds with 5 year returns of 160.72%.
The fund has an ongoing annual charge of 0.30%, coupled with huge returns of 611.48% over the past 10 years makes this fund one of the most attractive North American equity funds on the market.
Quilter Investors US Equity Growth
The Quilter Investors US Equity Growth fund has delivered exceptional returns versus peers through its active, concentrated approach to investing in high-quality U.S. growth companies. Over the past 1, 3, and 5 years the fund has returned growth of 37.51%, 40.12%, and 148.90% respectively, which rank among the highest returns in the IA North American sector.
The fund has a 0.90% OCF, which is the average for such an active, high-conviction U.S. growth strategy. Overall, the fund's strong long-term track record of outperformance gives confidence that it can continue to rank highly within such a competitive sector.
Royal London US Growth Trust
The Royal London US Growth Trust has established itself as a top-quartile performer within the highly competitive IA North American sector. The fund takes a growth-oriented approach focused on identifying high-quality U.S. companies with sustainable competitive advantages.
Over the past 1, 3, and 5 year periods the fund has generated impressive returns of 29.57%, 53.84%, and 108.33% respectively. These returns rank the fund among the top quartile of performers out of all 227 funds in the North American sector.
However, the fund hasn’t always enjoyed strong performance. For early investors in the fund, which launched in February 2001, plenty of patience was required as it was 11 years after launch before the fund began to deliver growth. However, between February 2012 and April 2024, the fund has returned growth of 434.48%.
The Best Performing Technology Funds
In the midst of a highly volatile 2022, many investors chose to dump technology stocks in favour of less volatile and more stable value-oriented funds. This was driven by concerns surrounding overvaluation and a perceived downward trajectory of technology funds. But the landscape has rapidly changed and many of those investors have found themselves missing out on the huge recovery and bull run technology funds have enjoyed over the past several months.
The IA Technology & Technology Innovations sector has seen exceptional performances, driven by the rapid pace of technological advancement and digital transformation and the 5 funds listed below have consistently been some of the top performing technology funds.
iShares S&P 500 Information Technology Sector UCITS ETF
The iShares S&P 500 Information Technology Sector UCITS ETF has been the top performing fund in the IA Technology & Technology Innovation sector over the past 3 & 5 years with huge returns of 84.13% and 213.40. The fund is an index tracker fund that tracks the S&P 500 Capped 35/20 Information Technology Index.
Since its launch on 20th November 2015, the fund has delivered exceptional growth of 517.26%. However, it's important to note that while the fund has enjoyed strong returns in recent months in particular, its concentrated sector focus also amplifies volatility risks, and as such, it may not be a suitable choice for the more risk averse investor.
L&G Global Technology Index Trust
The L&G Global Technology Index Trust offers investors a simple, low-cost way to gain broad exposure to the global technology sector. As a passive index fund, it aims to track the performance of the FTSE World Technology Index by replicating its constituent holdings.
This index comprises over 400 of the world's leading technology companies across various sub-sectors like software, semiconductor equipment, IT services, computers, communications equipment and electronic components. Some of the major names include Apple, Microsoft, NVIDIA, Broadcom, Cisco Systems and Taiwan Semiconductor Manufacturing.
By investing in the L&G fund, investors get instant diversification across technology giants and innovative upstarts based in the U.S., Asia and other developed markets. Over the past 1, 3 and 5 year periods, it has generated total returns of 47.54%, 65.77% and 193.65% respectively as it efficiently captured the uptrend of technology stocks.
However, the fund's lack of active management also means it fully participated in the sector's sharp selloff in 2022 amid rising interest rates and recession fears. During that period the fund returned negative growth of -28.57%.
But the fund's low ongoing charge of just 0.20% makes it one of the most attractive and cost-efficient options for UK investors to implement a technology tilt within their equity allocation.
Liontrust Global Technology Fund
The Liontrust Global Technology fund has delivered exceptional returns for investors over the short and long-term. Its performance ranks it as the top performing fund in the IA Technology & Technology Innovation sector over the past year with growth of 49.11%.
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.
Herald Worldwide Technology
The Herald Worldwide Technology B fund has performed well within the IA Technology & Technology Innovation peer group, achieving a 1, 3 & 5 year returns of 40.02%, 60.01% and 147.80%.
The fund launched in 1998 and although it is one of the more senior funds in the technology sector it is also one of the smallest with assets under management of just £97 million. The fund adopts a bottom-up, fundamentals-based approach, targeting fast-growing tech companies in diverse sub-sectors such as semiconductors, software, and IT services. The strategy includes a mix of large, established companies and promising mid to small-cap innovators, focusing on key trends like cloud computing and cybersecurity.
Despite its notable performance, the fund has an above-average ongoing charge of 1.06%, which is among the higher end of the sector and significantly higher than passive technology funds such as the L&G Global Technology Index Trust.
Invesco Technology S&P US Select Sector ETF
The Invesco Technology S&P US Select Sector ETF is a passively-managed fund that simply aims to replicate the performance of the S&P 500 Technology Select Sector Index.
This benchmark comprises the technology stocks from the S&P 500 with components spanning major tech hardware, software, semiconductor, IT services and internet firms. By tracking this technology-tilted index, this fund offers a concentrated portfolio of the sector's market leaders.
Over the past 1, 3 and 5 year periods to April 2024, it has generated strong cumulative returns of 50.32%, 89.54% and 224.89% respectively. These top-quartile returns underscore how an allocation to this fund can benefit portfolio returns when tech stocks are in favour.
From a cost perspective, the fund's annual charge of 0.10% is among the lowest for such a growth oriented fund. However, as the fund's strategy is to be overweight in technology companies in North America, it will lack diversification and potentially assume more risk than other technology funds with a broader global strategy.
The 10 funds featured in this report represent some of the top performing Technology and North American market funds on the market. But it's important to note that although they have delivered exceptional returns in recent years there is no guarantee they can continue to do so. For this reason, it is critical to maintain a globally diversified and well balanced investment strategy.
Caution - Don’t Abandon Asset Allocation To Chase Growth
The Technology sector and North American equity market have been driving growth in recent months and represent important markets for all growth oriented investors. However, it is critical not to become over reliant on these markets in the pursuit of growth.
The investment landscape over the past four years has been characterised by significant volatility, encompassing two major market crashes and multiple economic downturns. This period has witnessed substantial valuation swings, with wide performance disparities across sectors and regions. While such conditions can be unsettling, they are an inherent reality of the investment world and must be accounted for in any prudent, long-term investment strategy.
For the 2nd full quarter in succession, many core markets have delivered levels of growth not experienced since before the bear market of 2022. This positive performance is forecast to remain for the coming months ahead, although perhaps not to the same extent. However, during periods of strong market movement whether positive or negative it often entices a portion of investors to alter their spread of investments and to deviate away from a defined investment plan in order to increase investment in markets and regions such as technology & North America that may be outperforming in that moment.
We have recently seen a sizeable number of investors do just that. We believe such an approach to be misguided and overly risky. Research demonstrates that no single region or sector can maintain outperformance indefinitely, as dynamics shift with evolving economic and political factors. Consequently, regional performance can pivot rapidly, underscoring the importance of diversification for successful long-term investing.
This trend of concentrating portfolio allocations in select areas represents a departure from strategic asset allocation principles, potentially compromising long-term objectives and heightening volatility exposure.
Summary
No organisation, analyst, adviser or investor truly knows when markets will rise and fall. For that reason alone true diversification is the only way to maximise returns while managing risk effectively. Astute investors keep their eyes on long term outcomes through diversification and by weathering inevitable investment cycles rather than hopping in and out of sectors based on short-term performance that often prove fleeting.
At Yodelar, we have completed over 30,000 portfolio analysis and have witnessed first hand the proclivity for investors to shift the weighting of their portfolio towards asset classes that are currently performing well without the understanding that this will often unbalance their portfolio and increase risk.
Discipline and diversification matter most to grow wealth during bear and bull markets. History has demonstrated that the best outcomes come from resisting the temptation to abandon core markets or sectors that may be performing poorly in favour of loading into those that are experiencing, or worse have come to the end of an upturn cycle.
Data Driven Investment Portfolios From Yodelar
At Yodelar, our investment portfolios are grounded in rigorous due diligence. Over many years, our research team has conducted an extensive evaluation of the investment universe, assessing more than 100 fund managers, tens of thousands of funds across vehicles like mutual funds, ETFs, and investment trusts, and analysing over 40,000 model portfolios.
This careful scrutiny consistently reveals that only a small fraction of available funds and fund managers are able to consistently outperform their benchmarks across market cycles. In fact, our analysis shows that over 90% of model portfolios contain underlying funds that chronically underdeliver.
By identifying the attributes of top-tier funds and managers, we've developed portfolio construction methods aimed at maximising risk-adjusted returns. This research-driven process underpins our suite of strategically allocated, risk-rated model portfolios, which exclusively utilise best-in-class investment vehicles tailored to each asset class.
At Yodelar, we believe advanced analytics and active due diligence can give investors an advantage. To learn more about our disciplined approach and explore how we can help grow your wealth, schedule a no-obligation consultation with one of our advisors today.
