The best performing funds to invest in right now

7 min Read Published: 05 Aug 2022

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 (up to the start of 2022). 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 1.65
Anthony Eaton VT Downing Global Investors 1.33
Jeremy Gleeson AXA Framlington Global Technology 1.30
Richard Clode Janus Henderson Global Technology Leaders 1.26
Carlos Moreno / Thomas Brown Premier Miton European Opportunities 1.24
Peter J. Bye UBS US Growth 1.23
Tom Slater Baillie Gifford Long Term Global Growth Investment 1.18
Stephen Kelly AXA Framlington American Growth 1.15
Terry Smith Fundsmith Equity 1.14
Will Sutcliffe Baillie Gifford Emerging Markets Leading Companies 1.12

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 January 2017 (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 Fund performance rank 2007 to 2017 (out of 134) Fund performance rank 2017 to 2022 (out of 178)
Slater Growth 1 3
Liontrust Special Situations 2 20
IFSL Marlborough Special Situations 3 8
Royal London UK Mid-Cap Growth 4 22
ASI UK Unconstrained Equity 5 90
FTF Franklin UK Mid Cap 6 25
Unicorn Outstanding British Companies 7 153
BMO UK Mid-Cap 8 152
Schroder UK Opportunities 9 168
Schroder Recovery 10 123

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 5th August 2022.

The top-performing funds over 10 years

Asia Pacific Excluding Japan

Fund 10 Year Fund Performance %
Baillie Gifford Pacific 245.23
Jupiter Merian Asia Pacific 186.75
Invesco Asian (UK) 179.94
Fidelity Sustainable Asia Equity 171.25
Barings Eastern Trust 159.76
Average 123.36

Europe Excluding UK

Fund 10 Year Fund Performance %
IFSL Marlborough European Special Situations 298.79
BlackRock Continental European 254.62
SVM Continental Europe 253.90
BlackRock European Dynamic 247.88
Liontrust European Dynamic 211.99
Average 157.21

Japan

Fund 10 Year Fund Performance %
Baillie Gifford Japanese 213.70
JPM Japan 201.48
M&G Japan 186.61
AXA Framlington Japan 184.31
Janus Henderson Japan Opportunities 169.18
Average 144.68

Mixed Investment 0%-35% Shares

Fund 10 Year Fund Performance %
Omnis Investments Ltd Omnis Managed Cautious 64.59
L&G Mixed Investment 0-35% 52.59
BlackRock NURS II Consensus 35 48.84
Vanguard LifeStrategy 20% Equity 44.60
Sarasin Income & Reserves 43.20
Average 34.70

Mixed Investment 20%-60% Shares

Fund 10 Year Fund Performance %
Royal London Sustainable Diversified Trust 131.90
Artemis Monthly Distribution 115.52
AXA Global Sustainable Distribution 106.26
Invesco European High Income (UK) 94.61
Premier Miton Multi-Asset Distribution 88.26
Average 58.85

Mixed Investment 40%-85% Shares

Fund 10 Year Fund Performance %
Royal London Sustainable World Trust 234.86
COIF Charities Investment 173.88
Liontrust Sustainable Future Managed 172.04
Janus Henderson Global Responsible Managed 163.14
Wise Funds Limited TB Wise Multi-Asset Income 145.49
Average 92.20

North America

Fund 10 Year Fund Performance %
UBS US Growth 410.33
Baillie Gifford American 401.09
Jupiter Merian North American Equity 384.70
Ninety One American Franchise 376.89
AXA Framlington American Growth 375.82
Average 303.50

Sterling Corporate Bond

Fund 10 Year Fund Performance %
Schroder Sterling Corporate Bond 60.31
Royal London Corporate Bond 52.33
Rathbone Ethical Bond Fund 51.94
Royal London Sterling Credit 49.95
L&G Active Sterling Corporate Bond Plus 45.31
Average 34.36

Sterling High Yield

Fund 10 Year Fund Performance %
Schroder High Yield Opportunities 75.86
Invesco High Yield (UK) 67.13
Baillie Gifford High Yield Bond 54.32
abrdn High Yield Bond 53.71
AXA Global High Income 52.33
Average 46.44

Sterling Strategic Bond

Fund 10 Year Fund Performance %
GAM Credit Opportunities GBP 103.16
AXA Framlington Managed Income 85.87
Artemis High Income 68.27
Invesco Monthly Income Plus (UK) 62.38
Allianz Strategic Bond 55.95
Average 36.51

UK All Companies

Fund 10 Year Fund Performance %
Slater Recovery 240.72
Slater Growth 224.94
Royal London Sustainable Leaders Trust 213.39
ES R&M UK Recovery 210.16
Artemis SmartGARP UK Equity 198.55
Average 105.25

UK Smaller Companies

Fund 10 Year Fund Performance %
ES R&M UK Equity Smaller Companies 334.21
Liontrust UK Smaller Companies 306.13
Fidelity UK Smaller Companies 297.88
LF Gresham House UK Micro Cap 287.22
TB TB Amati UK Smaller Companies 251.64
Average 179.96

The top-performing funds over 5 years

Asia Pacific Excluding Japan

Fund 5 Year Fund Performance %
Baillie Gifford Pacific 72.69
Fidelity Asia Pacific Opportunities 67.83
BNY Mellon Oriental 44.55
Schroder Institutional Pacific 44.16
FSSA Asia Focus 40.72
Average 26.83

Europe Excluding UK

Fund 5 Year Fund Performance %
Premier Miton European Opportunities 69.91
BlackRock Continental European 68.34
SVM Continental Europe 56.15
Liontrust European Dynamic 49.54
IFSL Marlborough European Special Situations 49.17
Average 21.33

Japan

Fund 5 Year Fund Performance %
Fidelity Japan 53.57
FSSA Japan Focus 42.72
JPM Japan 31.35
Jupiter Japan Income 30.57
Baillie Gifford Japanese Income Growth 24.44
Average 17.53

Mixed Investment 0%-35% Shares

Fund 5 Year Fund Performance %
VT Chelsea Managed Cautious Growth 24.27
Royal London Sustainable Managed Growth Trust 17.46
True Potential Investments True Potential Cautious 2 15.84
VT AJ Bell Cautious 14.15
True Potential Investments True Potential Cautious 1 12.74
Average 6.07

Mixed Investment 20%-60% Shares

Fund 5 Year Fund Performance %
Royal London Sustainable Diversified Trust 39.62
VT Chelsea Managed Monthly Income 37.21
AXA Global Sustainable Distribution 29.48
Premier Miton Diversified Income 27.66
Rathbone Active Income and Growth Fund 25.44
Average 11.49

Mixed Investment 40%-85% Shares 

Fund 5 Year Fund Performance %
Royal London Sustainable World Trust 66.09
COIF Charities Investment 58.07
Liontrust Sustainable Future Managed 51.82
Liontrust Balanced 49.66
Janus Henderson Global Responsible Managed 47.69
Average 22.18

North America

Fund 5 Year Fund Performance %
AXA Framlington American Growth 125.60
UBS US Growth 114.02
Ninety One American Franchise 103.98
Baillie Gifford American 102.11
Liontrust US Opportunities 99.67
Average 78.71

Sterling Corporate Bond

Fund 5 Year Fund Performance %
Schroder Sterling Corporate Bond 17.70
Royal London Corporate Bond 8.49
Jupiter Investment Grade Bond 7.27
Royal London Sterling Credit 7.12
Royal London Sustainable Managed Income Trust 5.70
Average 2.37

Sterling High Yield

Fund 5 Year Fund Performance %
Schroder High Yield Opportunities 12.05
Invesco High Yield (UK) 10.30
AXA Global High Income 9.27
JPM Global High Yield Bond 8.93
abrdn High Yield Bond 8.90
Average 5.05

Sterling Strategic Bond

Fund 5 Year Fund Performance %
Allianz Strategic Bond 25.11
Jupiter Merian Global Strategic Bond 20.69
Jupiter Monthly Income Bond 18.62
Schroder Strategic Bond 17.11
Invesco Tactical Bond (UK) 14.86
Average 4.51

UK All Companies

Fund 5 Year Fund Performance %
MI MI Chelverton UK Equity Growth 69.32
Slater Recovery 65.91
Royal London Sustainable Leaders Trust 55.81
VT Sorbus Vector 55.43
CFP SDL Free Spirit 50.82
Average 16.71

UK Smaller Companies

Fund 5 Year Fund Performance %
Liontrust UK Micro Cap 74.08
Liontrust UK Smaller Companies 53.29
FP Octopus UK Micro Cap Growth 47.88
Fidelity UK Smaller Companies 45.97
ES R&M UK Equity Smaller Companies 41.04
Average 21.20