The funds for consistent returns – Update June 2025

The fund management industry promotes the idea of buying and holding actively managed funds for the long-term. Yet you are more likely to make more money by regularly reviewing your portfolio. In reality the reason why fund managers want you to stay invested with them is that it allows them to make more money from you via fund management charges.

However, I understand that there are times when you might not want to or can't switch your funds as often as you might want. For example, you may have a pension scheme that offers a limited choice of funds or restricts the number of switches you can perform. Or it may be that you like to have a core stable selection of funds in your portfolio around which you invest more actively in order to try to boost returns.

A number of years ago I carried out a piece of research aiming to identify funds for consistent returns. It focused on identifying funds that have consistently outperformed their peers over time, which aren't just focused on capital preservation. So I've gone back and refreshed the research, as I do periodically.

Long-term outperformance screen

It's a fact that 90% of fund managers fail to beat the market over the long term which has been shown by numerous pieces of research. Yet there are a few that have. However, judging overperformance or underperformance based on an arbitrary time frame can give a skewed result.

So instead I decided to analyse the performance of every unit trust and investment trust out there (over 1,600 of them) versus each other over multiple time frames to produce a shortlist. I only shortlisted those funds that outperformed the average of their peer group (sector) over the following time periods:

• 1 year
• 3 years
• 5 years
• 10 years

Then to include an element of consistency the funds also had to show a similar level of outperformance in each of the last 5 years.

I also wanted to make sure that they were genuinely beating the market rather than simply doing better than their dud peers. So I also added a few screens which give an indication of fund manager skill. This would limit the likelihood that a fund manager had simply managed any outperformance by taking excessive risks in a rising market. These additional screens were namely:

Alpha

Alpha is a figure which measures a manager’s apparent skill at picking winning investments versus their benchmark. Alpha is the excess return versus the return of a fund’s benchmark (i.e. the market). So a fund with a positive alpha indicates that the fund manager has outperformed through skill. While a negative alpha figure would indicate underperformance.

Sharpe ratio

The sharpe ratio is not a widely known statistic yet it indicates how much extra return a fund manager has achieved for the increased risk they have taken. There is nothing wrong with fund managers taking calculated investment risks if they result in additional returns for investors. So the higher a fund’s sharpe ratio the better.

Maximum Drawdown

Finally, I analysed how the funds had performed over the last 3 years and what the maximum fall during the period was for each fund. I then only included those with the lowest drawdowns versus their peers. 80-20 Investor tables include the drawdown figure (Max Fall) as it is useful but not published widely.

80-20 Investor algorithm screen

The above screening left 39 funds (out of over 1,200 unit trusts and 450 investment trusts) which have shown a consistency of return over the medium to long-term (in various market conditions), yet doing so without taking unnecessary risk. This is by far the largest list of 'consistent funds' that I've ever produced and the first time there have been no funds that have retained their place on the list. Remember consistency, doesn't mean that the fund doesn't lose money in a market slump, but that it has shown a consistent level of outperformance versus its peers over time.

The funds in blue are in the current BOTB while the funds in orange are in the BFBS tables (as of 6th June 2025). It's good to see Invesco Asian (UK), Man Japan Core Alpha and Premier Miton Tellworth UK Select in the list as I hold all of them in my own £50k portfolio,

Name	Sector	ISIN Code	1 month return %	3 month return %	6 month return %	Max weekly fall in the last 6 months	Ongoing Charge	Investment trust (discount /premium)
Invesco Asian (UK)	Asia Pacific Excluding Japan	GB00B1W7HW60	1.83	-1.24	-1.78	-12.31	1.15
Schroder Asian Income	Asia Pacific Excluding Japan	GB00B5BJ7M17	2.42	0.82	-0.87	-10.65	0.9
M&G Asian	Asia Pacific Excluding Japan	GB00B7DBH187	1.34	-1.15	-1.35	-12.03	0.85
WS Ardtur Continental European	Europe Excluding UK	GB0031831570	4.76	6.9	18.72	-9.11	1.71
Aviva Inv Multi-Manager Flexible	Flexible Investment	GB00B1N95162	3.2	-2.37	-0.56	-10.62	1.45
Invesco Managed Growth (UK)	Flexible Investment	GB00B3RSB597	3.04	-0.98	-0.15	-10.31	1.27
M&G Managed Growth	Flexible Investment	GB00B71RLN80	2.3	-1.26	0.15	-9.06	0.88
Aviva Inv International Index Tracking	Global	GB0004459912	3.96	-3.99	-4.33	-15.61	0.45
Jupiter Merian Global Equity	Global	GB00B1XG8F22	5.48	-1.89	-2.42	-15.1	1.25
Invesco Global Equity (UK)	Global	GB00B3RS9Q62	2.77	-4.78	-5.02	-15.45	1.12
Schroder QEP Global Core	Global	GB00B5310487	4.03	-4.2	-4.2	-16.37	0.3
Thornbridge Thornbridge Global Opportunities	Global	GB00B5TP8W88	3.49	-2.75	2.21	-12.68	0.99
M&G Global Strategic Value	Global	GB00B6173L33	2.93	-2.71	1.85	-11.37	0.9
CT Global Total Return Bond (GBP Hedged)	Global Bonds	GB0033145482	1.35	2.41	3.83	-0.78	0
AXA US Short Duration High Yield Bond	Global Bonds	GB00B59VLT43	0.79	1.1	2.6	-1.53	0.75
Invesco Global Emerging Markets (UK)	Global Emerging Markets	GB00B3RW7S64	1.51	1.42	1.4	-10.31	1.2
M&G Global Emerging Markets	Global Emerging Markets	GB00B6TDBH53	1.99	0.33	1.07	-13.18	1
Man Japan Core Alpha	Japan	GB00B0119B50	2.68	-0.83	1.52	-13.19	0.9
WS Morant Wright Nippon Yield	Japan	GB00B42MKS95	5.3	3.25	4.39	-12.74	1.18
Fidelity Japan	Japan	GB00B882N041	5.67	6.64	5.39	-11.72	0.78
Invesco Distribution (UK)	Mixed Investment 20-60% Shares	GB00B1W7J196	2.1	0.79	1.36	-4.79	0.99
Schroder MM Diversity	Mixed Investment 20-60% Shares	GB00B60CZD52	1.43	3.26	4.56	-2.92	1.18
M&G Episode Allocation	Mixed Investment 20-60% Shares	GB00B7FPWG84	1.2	-0.41	1.45	-6.16	0.9
Scottish Friendly Managed Growth	Mixed Investment 40-85% Shares	GB0006929029	1.84	-4.01	0.6	-10.39	1.42
CT US Smaller Companies	North American Smaller Companies	GB00B06PF580	4.98	-8.36	-16.61	-24.57	1.64
L&G Short Dated Sterling Corporate Bond Index	Sterling Corporate Bond	GB00BKGR3H21	0.2	1.3	2.67	-0.45	0.14
Premier Miton Tellworth UK Select	Targeted Absolute Return	GB00BNY7YM73	1	1.95	4.62	-2.14	0.93
L&G Global Technology Index Trust	Technology & Technology Innovation	GB00B0CNH163	7.17	-1.45	-5.07	-24.79	0.32
SPW UK Equity	UK All Companies	GB00B0JVK694	3.75	1.19	5.79	-9.53	0.84
Invesco UK Opportunities (UK)	UK All Companies	GB00B1W7HM62	4.17	4.51	7.83	-6.47	1.11
Artemis SmartGARP UK Equity	UK All Companies	GB00B2PLJM64	6.1	7.41	16.33	-8.49	0.86
JOHCM UK Dynamic	UK All Companies	GB00B4T7HR59	6.36	4.35	8.53	-9.69	0.82
Man Undervalued Assets Fund	UK All Companies	GB00BFH3NC99	3.77	3.55	6.98	-10.11	0.9
Man Income Fund	UK Equity Income	GB00B0117C28	3.9	3.83	9.38	-8.86	0.9
Aberforth UK Small Companies	UK Smaller Companies	GB0000072727	6.79	8.52	1.84	-14.18	0.82
Fidelity UK Smaller Companies	UK Smaller Companies	GB00B7VNMB18	7.52	7.71	3.21	-14	0.93
Schroder Investment Management Ltd Schroder Asian Total Return Investment Company Plc	Asia Pacific (investment trust)	GB0008710799	4.04	0.05	-1.4	-16.35		-1.6
JPM JPMorgan European Growth & Income plc	Europe (investment trust)	GB00BPR9Y246	4.06	8.24	25.3	-10.04		-3.62
Janus Henderson Henderson High Income Trust	UK Equity & Bond Income (investment trust)	GB0009580571	4.36	6.83	11.33	-6.56	1.96	-6.61

 

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