The best performing funds to invest in right now

15 min Read Published: 14 Sep 2021

The best performing funds to invest in right nowIn this article, I list the best performing funds over 10 years and 5 years. I also highlight the best investment fund managers in the UK. Yet you shouldn’t just focus on past performance over 5 or 10 years alone.

As one of the most frequently quoted investment experts in the UK national press, including The Times and The Telegraph, I will show you how to pick the best performing funds to invest now. That is very different from simply opting for the best performing funds over the last 5 or 10 years.

In fact I would invest in hardly any of the top performing funds over the last 5 or 10 years and neither should you

Funds are inconsistent and you should invest in funds that suit the current economic and investment environment. I will show you how I successfully identify the best funds to invest in with an increased chance of performing well going forward.

First of all...the funds to avoid

Before I move on to the best funds to invest in it's also important to be aware of the funds to avoid. Unfortunately, there are a number of popular funds that should be avoided as they will hit your returns. You can download a useful list of these funds which the research calls 'dog funds'. So feel free to download the guide and use it as a reference point.

Best performing investment funds to invest in

The 10 Top Performing Fund Managers

Fund managers seldom outperform the market in the short term and almost never over the long term. Yet that doesn't mean you should just invest in index trackers or Exchange Traded Funds (ETFs). There is still a place for picking the best active investment fund managers. However, the top performing investment fund managers historically won't outperform the market or their peers all of the time. The table in the next section of this article emphasises the impact on the returns of your misplaced loyalty to even the best fund managers. The key is to invest in the best funds when the investment environment suits them and to ditch them when it doesn't, in favour of their peers most likely to outperform. You should NEVER invest your money with a fund manager for the long term.

The table below shows the 10 top performing fund managers over the last five years (last updated September 2021). I analysed the returns of thousands of fund managers versus the level of risk they took with investors' money to arrive at the final table. The best investment fund managers do not gamble with investors' money, instead, they invest it strategically to minimise any losses. The Sharpe Ratio is a measure of the level of excess return the fund manager earns for the extra risk he/she has taken. The higher the figure the better.

Fund Manager Main fund managed Sharpe ratio
Nigel Ashfield ARC TIME Freehold Income Authorised 1.71
Rosemary Banyard VT Downing Unique Opportunities 1.63
Tom Slater Baillie Gifford Long Term Global Growth Investment 1.44
Carlos Moreno / Thomas Brown Premier Miton European Opportunities 1.40
Anthony Eaton VT Downing Global Investors 1.35
Jeremy Gleeson AXA Framlington Global Technology 1.33
Richard Clode Janus Henderson Global Technology Leaders 1.31
Gary Robinson Baillie Gifford American 1.30
Will Sutcliffe Baillie Gifford Emerging Markets Leading Companies 1.22
Terry Smith Fundsmith Equity 1.15

How to pick the best performing funds to invest in now

The key to successful investing is to pick the funds most likely to outperform their peers in the future. That is not the same as picking the funds or fund managers with the best performance over the last 5 or 10 years.

By way of example if you had picked the 10 best performing funds over 10 years leading up to September 2016 (from the UK All Companies sector) and then invested in them over the next 5 years you'd have been in for a surprise. As the table below shows, over the next 5 years you would have been better off investing in alternative funds within the same sector.

Fund Performance rank September 2006 to September 2016 (out of 133) Performance rank September 2016 to September 2021 (out of 178)
Slater Growth 1 4
Liontrust Special Situations 2 29
Marlborough Special Situations 3 6
Royal London UK Mid-Cap Growth 4 23
Franklin UK Mid Cap 5 27
ASI UK Value Equity 6 72
BMO UK Mid-Cap 7 155
Threadneedle UK Mid 250 8 47
Marlborough Multi-Cap Growth 9 14
Schroder UK Opportunities 10 163

So how can you choose the best funds to invest in right now? The world of fund management brainwashes investors into thinking that you have to buy and hold a fund manager or fund. Yet why should you? The evidence overwhelmingly shows that no fund manager outperforms in every market condition. The fact that a fund manager or fund might top a table of the best performing managers (or funds) over 5 years is just a coincidence of the timeframe used. Use another timeframe (as shown above) and they won't come anywhere near the top. This is true of every fund, even the most popular investment funds. 

So if you can't rely on long term performance tables to pick funds that are more likely to perform well in the future then how can you do it?

The key to investing is to choose the best funds to invest in for the current environment and to use a process that screens out the noise and emotional headlines and focuses on the fundamentals. It's a very simple process that I explain in a short email series How to become a successful DIY investor. In the emails I show you:

  • The most important investment lesson you will ever learn based on over 100 years of research and experience
  • The simple and easy to use tool that will help you beat the market
  • The investment process fund managers want to keep to themselves.
  • How to know which funds to buy and which to sell, in minutes.

I have used the technique to help investors outperform the market and professional fund managers using only a few minutes a month, using 80-20 Investor. You can read their reviews of 80-20 Investor as well as see the performance in the widget at the foot of this article. I also successfully run £50,000 of my own money live on the site to show how simple it is. 80-20 Investor helps you to simply decide the funds to invest in via your existing fund platform. Find out more about how the service works and take advantage of a 30 day FREE trial.

The top-performing funds over 5 years and 10 years

The tables below show the best performing funds to invest in over 5 years and 10 years. All these funds can be held in a Stocks and Shares ISA or a Self Invested Personal Pension (SIPP). The percentage return shown is the total return figures which assumes all income and dividends are reinvested. The funds are grouped by fund sector so you can see the best performing funds for the most popular fund sectors.

While the funds below would have been the best funds to invest in over the last 10 years and 5 years, within their respective sectors, there is no evidence that they will continue to perform well as I explained earlier. In fact, taking such a long term view masks long periods of underperformance as I explained in the section above, titled How to pick the best performing funds to invest in now.

The data below shows the 5 and 10 year performance periods ending 13th September 2021.

The top-performing funds over 10 years

Asia Pacific Excluding Japan

Fund 10 Year Fund Performance %
Baillie Gifford Pacific 379.73
Jupiter Merian Asia Pacific 235.44
Schroder Asian Alpha Plus 232.03
Barings Eastern Trust 226.10
JPM Asia Growth 214.40
Average 144.97

Europe Excluding UK

Fund 10 Year Fund Performance %
Baillie Gifford European 447.38
BlackRock European Dynamic 431.43
Marlborough European Multi-Cap 420.36
BlackRock Continental European 394.2
Allianz Continental European 355.73
Average 214.12

Japan

Fund 10 Year Fund Performance %
Baillie Gifford Japanese 286.22
JPM Japan 274.67
AXA Framlington Japan 253.60
Fidelity Japan Smaller Companies 224.64
Barings Japan Growth Trust 203.38
Average 180.76

Mixed Investment 0%-35% Shares

Fund 10 Year Fund Performance %
Omnis Investments Ltd Omnis Managed Cautious 98.07
Vanguard LifeStrategy 20% Equity 74.59
Sarasin Income & Reserves 74.53
Fidelity Multi Asset Income 69.59
Threadneedle Managed Bond Focused 68.06
Average 50.63

Mixed Investment 20%-60% Shares

Fund 10 Year Fund Performance %
Royal London Sustainable Diversified Trust 186.41
AXA Global Distribution 132.68
Premier Miton Multi-Asset Distribution 120.24
Invesco European High Income (UK) 120.08
AXA Ethical Distribution 117.79
Average 72.98

Mixed Investment 40%-85% Shares

Fund 10 Year Fund Performance %
Royal London Sustainable World Trust 333.82
Liontrust Sustainable Future Managed 260.00
Baillie Gifford Managed 259.76
COIF Charities Investment 209.31
Omnis Investments Ltd Omnis Managed Adventurous 187.62
Average 113.38

North America

Fund 10 Year Fund Performance %
Baillie Gifford American 998.91
UBS US Growth 512.31
FTF Franklin US Opportunities 475.57
AXA Framlington American Growth 472.96
Thesis Eldon 440.09
Average 345.18

Sterling Corporate Bond

Fund 10 Year Fund Performance %
Janus Henderson Inst Long Dated Credit 105.48
Schroder Sterling Corporate Bond 98.95
Royal London Corporate Bond 87.97
Rathbone Ethical Bond Fund 85.04
L&G Managed Monthly Income Trust 83.44
Average 61.06

Sterling High Yield

Fund 10 Year Fund Performance %
Schroder High Yield Opportunities 119.35
Invesco High Yield (UK) 119.18
Baillie Gifford High Yield Bond 92.83
ASI High Yield Bond 87.12
AXA Global High Income 84.80
Average 75.92

Sterling Strategic Bond

Fund 10 Year Fund Performance %
GAM Credit Opportunities GBP 145.30
AXA Framlington Managed Income 113.36
Artemis High Income 104.04
Invesco Monthly Income Plus (UK) 98.26
Allianz Strategic Bond 98.08
Average 59.93

UK All Companies

Fund 10 Year Fund Performance %
Jupiter UK Mid Cap 354.78
Marlborough Special Situations 329.60
Premier Miton Ethical 324.12
AXA Framlington UK Mid Cap 307.99
Slater Growth 305.64
Average 140.25

UK Smaller Companies

Fund 10 Year Fund Performance %
ES R&M UK Equity Smaller Companies 537.20
Liontrust UK Smaller Companies 505.11
LF Gresham House UK Micro Cap 429.15
Marlborough UK Micro Cap Growth 414.00
Fidelity UK Smaller Companies 404.19
Average 277.81

The top-performing funds over 5 years

Asia Pacific Excluding Japan

Fund 5 Year Fund Performance %
Baillie Gifford Pacific 184.52
Barings Eastern Trust 112.04
Fidelity Asia Pacific Opportunities 106.31
JPM Asia Growth 106.13
BNY Mellon Oriental 98.65
Average 66.00

Europe Excluding UK

Fund 5 Year Fund Performance %
Premier Miton European Opportunities 180.05
Baillie Gifford European 154.16
BlackRock European Dynamic 140.05
BlackRock Continental European 139.76
Marlborough European Multi-Cap 129.83
Average 64.98

Japan

Fund 5 Year Fund Performance %
FSSA Japan Focus 147.55
JPM Japan 108.36
Threadneedle Japan 86.62
Fidelity Japan 85.21
Baillie Gifford Japanese 82.93
Average 63.00

Mixed Investment 0%-35% Shares

Fund 5 Year Fund Performance %
Royal London Sustainable Managed Growth Trust 39.32
True Potential Investments True Potential Cautious 1 33.89
Omnis Investments Ltd Omnis Managed Cautious 30.92
EF Brompton Global Conservative 28.49
True Potential Investments True Potential Cautious 3 25.95
Average 18.43

Mixed Investment 20%-60% Shares

Fund 5 Year Fund Performance %
Royal London Sustainable Diversified Trust 67.65
Liontrust Sustainable Future Defensive Managed 54.80
Rathbone Active Income and Growth Fund 49.16
Barclays Wealth Global Markets 3 48.25
AXA Global Distribution 46.38
Average 27.15

Mixed Investment 40%-85% Shares 

Fund 5 Year Fund Performance %
Royal London Sustainable World Trust 113.24
Liontrust Sustainable Future Managed 104.58
Baillie Gifford Managed 108.22
COIF Charities Investment 79.31
Omnis Investments Ltd Omnis Managed Adventurous 65.14
Average 43.24

North America

Fund 5 Year Fund Performance %
Baillie Gifford American 362.94
UBS US Growth 174.26
AXA Framlington American Growth 173.70
Ninety One American Franchise 165.60
FTF Franklin US Opportunities 159.23
Average 105.54

Sterling Corporate Bond

Fund 5 Year Fund Performance %
Schroder Sterling Corporate Bond 39.71
Rathbone Ethical Bond Fund 27.67
Royal London Corporate Bond 25.37
Janus Henderson Inst Long Dated Credit 25.05
Royal London Sterling Credit 24.67
Average 16.84

Sterling High Yield

Fund 5 Year Fund Performance %
Schroder High Yield Opportunities 36.41
Invesco High Yield (UK) 32.68
AXA Global High Income 29.74
L&G High Income Trust 29.36
Baillie Gifford High Yield Bond 27.48
Average 25.61

Sterling Strategic Bond

Fund 5 Year Fund Performance %
Allianz Strategic Bond 39.59
Schroder Strategic Bond 33.97
GAM Credit Opportunities GBP 33.19
Invesco Monthly Income Plus (UK) 31.55
Jupiter Monthly Income Bond 31.52
Average 18.89

UK All Companies

Fund 5 Year Fund Performance %
MI Chelverton UK Equity Growth 188.38
Slater Recovery 135.57
VT The Beagle 114.85
Slater Growth 114.27
ASI UK Opportunities Equity 104.24
Average 41.06

UK Smaller Companies

Fund 5 Year Fund Performance %
Liontrust UK Micro Cap 170.42
FP Octopus UK Micro Cap Growth 170.40
Liontrust UK Smaller Companies 140.00
Marlborough UK Micro Cap Growth 138.51
TB TB Amati UK Smaller Companies 134.09
Average 97.77