The best performing funds to invest in right now

15 min Read Published: 10 Jan 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 (last updated January 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 1.3
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 Performance rank January 2007 to January 2017 (out of 134) Performance rank January 2017 to January 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 January 2022.

The top-performing funds over 10 years

Asia Pacific Excluding Japan

Fund 10 Year Fund Performance %
Baillie Gifford Pacific 363.54
Jupiter Merian Asia Pacific 242.56
Barings Eastern Trust 222.14
Schroder Asian Alpha Plus 217.70
JPM Asia Growth 209.09
Average 157.13

Europe Excluding UK

Fund 10 Year Fund Performance %
IFSL Marlborough European Special Situations 394.79
BlackRock European Dynamic 381.12
Baillie Gifford European 365.12
BlackRock Continental European 356.88
Allianz Continental European 310.79
Average 207.11

Japan

Fund 10 Year Fund Performance %
Baillie Gifford Japanese 258.04
JPM Japan 252.86
AXA Framlington Japan 229.52
Fidelity Japan Smaller Companies 202.20
Janus Henderson Japan Opportunities 199.10
Average 160.47

Mixed Investment 0%-35% Shares

Fund 10 Year Fund Performance %
Omnis Investments Ltd Omnis Managed Cautious 90.78
L&G Mixed Investment 0-35% 68.89
Sarasin Income & Reserves 68.88
Vanguard LifeStrategy 20% Equity 65.6
Fidelity Multi Asset Income 64.59
Average 49.68

Mixed Investment 20%-60% Shares

Fund 10 Year Fund Performance %
Royal London Sustainable Diversified Trust 178.88
AXA Global Distribution 129.09
Invesco European High Income (UK) 117.89
Premier Miton Multi-Asset Distribution 113.08
Omnis Investments Ltd Omnis Multi-Manager Balanced 111.77
Average 76.13

Mixed Investment 40%-85% Shares

Fund 10 Year Fund Performance %
Royal London Sustainable World Trust 311.31
Liontrust Sustainable Future Managed 238.76
Baillie Gifford Managed 219.77
COIF Charities Investment 212.94
Janus Henderson Global Responsible Managed 198.69
Average 115.59

North America

Fund 10 Year Fund Performance %
Baillie Gifford American 763.3
UBS US Growth 538.17
AXA Framlington American Growth 483.46
FTF Franklin US Opportunities 434.66
Thesis Eldon 423.06
Average 355.31

Sterling Corporate Bond

Fund 10 Year Fund Performance %
Schroder Sterling Corporate Bond 95.67
Janus Henderson Inst Long Dated Credit 89.08
Royal London Corporate Bond 82.95
Rathbone Ethical Bond Fund 79.91
L&G Managed Monthly Income Trust 78.61
Average 60.04

Sterling High Yield

Fund 10 Year Fund Performance %
Schroder High Yield Opportunities 113.01
Invesco High Yield (UK) 108.33
Baillie Gifford High Yield Bond 89.41
ASI European High Yield Bond 85.3
ASI High Yield Bond 85.13
Average 78.57

Sterling Strategic Bond

Fund 10 Year Fund Performance %
GAM Credit Opportunities GBP 142.98
AXA Framlington Managed Income 112.94
Artemis High Income 100.58
Invesco Monthly Income Plus (UK) 92.13
Janus Henderson Fixed Interest Monthly Income 89.8
Average 59.81

UK All Companies

Fund 10 Year Fund Performance %
Slater Growth 313.71
IFSL Marlborough Special Situations 311.01
Jupiter UK Mid Cap 292.35
Royal London Sustainable Leaders Trust 273.6
Slater Recovery 272.09
Average 137.49

UK Smaller Companies

Fund 10 Year Fund Performance %
ES R&M UK Equity Smaller Companies 477.84
Liontrust UK Smaller Companies 469.63
LF Gresham House UK Micro Cap 434.59
Fidelity UK Smaller Companies 398.62
IFSL Marlborough UK Micro-Cap Growth 383.6
Average 293.93

The top-performing funds over 5 years

Asia Pacific Excluding Japan

Fund 5 Year Fund Performance %
Baillie Gifford Pacific 163.68
Fidelity Asia Pacific Opportunities 114.11
Barings Eastern Trust 98.63
JPM Asia Growth 92.74
BNY Mellon Oriental 90.04
Average 58.87

Europe Excluding UK

Fund 5 Year Fund Performance %
Premier Miton European Opportunities 165.93
BlackRock Continental European 130.8
BlackRock European Dynamic 126.26
Baillie Gifford European 124.58
Allianz Continental European 114.56
Average 61.49

Japan

Fund 5 Year Fund Performance %
FSSA Japan Focus 116.45
JPM Japan 84.37
Fidelity Japan 67.38
Threadneedle Japan 57.97
Baillie Gifford Japanese 55.98
Average 38.34

Mixed Investment 0%-35% Shares

Fund 5 Year Fund Performance %
Royal London Sustainable Managed Growth Trust 39.95
True Potential Investments True Potential Cautious 1 31.1
Omnis Investments Ltd Omnis Managed Cautious 28.12
True Potential Investments True Potential Cautious 2 25.28
L&G Mixed Investment 0-35% 25.03
Average 17.46

Mixed Investment 20%-60% Shares

Fund 5 Year Fund Performance %
Royal London Sustainable Diversified Trust 70.2
Liontrust Sustainable Future Defensive Managed 51.21
AXA Global Distribution 44.14
Rathbone Active Income and Growth Fund 43.01
T. Bailey Dynamic 42.88
Average 24.45

Mixed Investment 40%-85% Shares 

Fund 5 Year Fund Performance %
Royal London Sustainable World Trust 110.12
Liontrust Sustainable Future Managed 96.07
Baillie Gifford Managed 88.59
Liontrust Balanced 78.77
COIF Charities Investment 77.53
Average 39.57

North America

Fund 5 Year Fund Performance %
Baillie Gifford American 275.87
UBS US Growth 179.31
AXA Framlington American Growth 174.66
Morgan Stanley US Advantage 143.64
FTF Franklin US Opportunities 140.77
Average 98.48

Sterling Corporate Bond

Fund 5 Year Fund Performance %
Schroder Sterling Corporate Bond 42.85
Janus Henderson Inst Long Dated Credit 28.47
Royal London Corporate Bond 26.61
Rathbone Ethical Bond Fund 26.09
Royal London Sterling Credit 25.71
Average 17.08

Sterling High Yield

Fund 5 Year Fund Performance %
Schroder High Yield Opportunities 33.41
Invesco High Yield (UK) 30.29
AXA Global High Income 24.81
ASI High Yield Bond 24.03
JPM Global High Yield Bond 23.72
Average 21.55

Sterling Strategic Bond

Fund 5 Year Fund Performance %
Allianz Strategic Bond 39.74
Schroder Strategic Bond 32.69
Jupiter Monthly Income Bond 32.51
Janus Henderson Fixed Interest Monthly Income 32.05
GAM Credit Opportunities GBP 31.61
Average 18.25

UK All Companies

Fund 5 Year Fund Performance %
MI Chelverton UK Equity Growth 155.23
Slater Recovery 128.38
Slater Growth 113.87
VT The Beagle 109.7
CFP SDL Free Spirit 91.65
Average 39.07

UK Smaller Companies

Fund 5 Year Fund Performance %
FP Octopus UK Micro Cap Growth 147.17
Liontrust UK Micro Cap 144.28
Liontrust UK Smaller Companies 124.33
ASI UK Smaller Companies 122.84
IFSL Marlborough UK Micro-Cap Growth 113.84
Average 84.04