The best performing funds to invest in right now

15 min Read Published: 12 Jan 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 December 2020). 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 Freehold Income Authorised 1.76
Gary Robinson Baillie Gifford American / Baillie Gifford Global Stewardship 1.49
Tom Slater Baillie Gifford Long Term Global Growth Investment 1.48
Mark Urquhart Baillie Gifford Long Term Global Growth Investment 1.36
Helen Xiong Baillie Gifford UK and Worldwide Equity 1.32
David J. Eiswert T. Rowe Price Global Focused Growth Equity 1.25
Jeremy Gleeson AXA Framlington Global Technology 1.23
Alison Porter Janus Henderson Global Technology Leaders 1.19
Ewan Markson-Brown Baillie Gifford Pacific 1.19
Anthony Srom Fidelity Asia Pacific Opportunities 1.16

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 December 2015 (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 Dec 2005 to Dec 2015 (out of 144) Performance rank Dec 2015 to Dec 2020 (out of 230)
ASI UK Unconstrained Equity 1 226
Slater Growth 2 16
Franklin UK Mid Cap 3 80
Merian UK Mid Cap 4 22
Liontrust Special Situations 5 19
Threadneedle UK Mid 250 6 88
SVM UK Growth 7 58
PUTM UK StockMarket 3 8 154
LF Majedie UK Focus 9 71
Marlborough Multi-Cap Growth 10 11

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 6th December 2020.

The top-performing funds over 10 years

Asia Pacific Excluding Japan

Fund 10 Year Fund Performance %
Baillie Gifford Pacific 281.81
Schroder Asian Alpha Plus 187.63
Ninety One Asia Pacific Franchise 168.21
Merian Asia Pacific 168.00
Allianz Total Return Asian Equity 164.36
Average 108.95

Europe Excluding UK

Fund
10 Year Fund Performance %
Baillie Gifford European 284.05
BlackRock European Dynamic 240.88
Allianz Continental European 210.43
BlackRock Continental European 209.03
Jupiter European 199.39
Average 119.99

Japan

Fund
10 Year Fund Performance %
Legg Mason IF Japan Equity 905.96
JPM Japan 278.50
Baillie Gifford Japanese 246.47
Fidelity Japan Smaller Companies 211.44
AXA Framlington Japan 203.45
Average 137.28

Mixed Investment 0%-35% Shares

Fund
10 Year Fund Performance %
Omnis Investments Ltd Omnis Managed Cautious 83.65
Sarasin Income & Reserves 72.06
Fidelity Multi Asset Income 63.94
Threadneedle Managed Bond Focused 62.15
AXA Defensive Distribution 59.77
Average 45.59

Mixed Investment 20%-60% Shares

Fund
10 Year Fund Performance %
Royal London Sustainable Diversified Trust 150.66
AXA Global Distribution 106.43
Premier Miton Multi-Asset Distribution 94.12
Invesco European High Income (UK) 91.59
Premier Miton Liberation V 91.51
Average 57.55

Mixed Investment 40%-85% Shares

Fund
10 Year Fund Performance %
Royal London Sustainable World Trust 256.30
Baillie Gifford Managed 202.50
Liontrust Sustainable Future Managed 187.91
COIF Charities Investment 165.58
MFM Hathaway 138.06
Average 81.72

North America

Fund
10 Year Fund Performance %
Baillie Gifford American 793.98
UBS US Growth 410.35
AXA Framlington American Growth 365.40
Franklin US Opportunities 349.88
Threadneedle American Extended Alpha 337.73
Average 249.31

Sterling Corporate Bond

Fund
10 Year Fund Performance %
Janus Henderson Inst Long Dated Credit 127.46
Schroder Sterling Corporate Bond 98.52
Royal London Sterling Credit 92.84
Royal London Corporate Bond 91.15
LG Managed Monthly Income Trust 90.01
Average 65.59

Sterling High Yield

Fund
10 Year Fund Performance %
Invesco High Yield (UK) 87.59
Baillie Gifford High Yield Bond 81.67
AXA Global High Income 81.09
AXA Pan European High Yield Bond 77.88
Schroder High Yield Opportunities 77.11
Average 62.75

Sterling Strategic Bond

Fund
10 Year Fund Performance %
Allianz Strategic Bond 112.14
Baillie Gifford Strategic Bond 99.28
Royal London Ethical Bond 90.06
Artemis High Income 88.22
Aviva Inv Higher Income Plus 77.29
Average 59.47

UK All Companies

Fund
10 Year Fund Performance %
Merian UK Mid Cap 245.77
Slater Growth 218.94
Liontrust Special Situations 211.64
Royal London Sustainable Leaders Trust 200.35
Barclays UK Lower Cap 199.58
Average 85.45

UK Smaller Companies

Fund
10 Year Fund Performance %
Liontrust UK Smaller Companies 353.66
ES R&M UK Equity Smaller Companies 348.81
LF Gresham House UK Micro Cap 343.86
Marlborough UK Micro Cap Growth 295.10
AXA Framlington UK Smaller Cos 284.07
Average 177.63

The top-performing funds over 5 years

Asia Pacific Excluding Japan

Fund
5 Year Fund Performance %
Baillie Gifford Pacific 185.71
JPM Asia Growth 159.93
Fidelity Asia Pacific Opportunities 157.12
Fidelity Asia 136.15
Ninety One Asia Pacific Franchise 134.20
Average 96.56

Europe Excluding UK

Fund
5 Year Fund Performance %
Baillie Gifford European 147.09
BlackRock European Dynamic 116.52
Marlborough European Multi-Cap 110.60
BlackRock Continental European 106.52
Allianz Continental European 91.68
Average 56.61

Japan

Fund
5 Year Fund Performance %
Legg Mason IF Japan Equity 192.57
FSSA Japan Focus 166.66
JPM Japan 126.32
Baillie Gifford Japanese 106.92
Fidelity Japan Smaller Companies 93.31
Average 69.14

Mixed Investment 0%-35% Shares

Fund
5 Year Fund Performance %
Royal London Sustainable Managed Growth Trust 44.59
BlackRock NURS II Consensus 35 39.12
Omnis Investments Ltd Omnis Managed Cautious 36.07
Vanguard LifeStrategy 20% Equity 33.15
True Potential Investments SVS TPI Cautious 3 32.64
Average 21.55

Mixed Investment 20%-60% Shares

Fund
5 Year Fund Performance %
Royal London Sustainable Diversified Trust 68.49
AXA Global Distribution 55.36
Liontrust Sustainable Future Defensive Managed 53.23
Barclays Wealth Global Markets 3 46.43
Huntress IFSL Ravenscroft Huntress Balanced 46.25
Average 26.11

Mixed Investment 40%-85% Shares 

Fund
5 Year Fund Performance %
Baillie Gifford Managed 110.59
Royal London Sustainable World Trust 105.61
Liontrust Sustainable Future Managed 90.73
Liontrust Balanced 70.44
COIF Charities Investment 69.25
Average 39.88

North America

Fund
5 Year Fund Performance %
Baillie Gifford American 385.54
UBS US Growth 159.65
Ninety One American Franchise 158.18
Natixis Loomis Sayles U.S. Equity Leaders 155.91
AXA Framlington American Growth 149.60
Average 104.48

Sterling Corporate Bond

Fund
5 Year Fund Performance %
Janus Henderson Inst Long Dated Credit 54.82
Schroder Sterling Corporate Bond 52.13
LG Managed Monthly Income Trust 37.14
Schroder All Maturities Corporate Bond 37.06
Merian Corporate Bond 37.05
Average 27.41

Sterling High Yield

Fund
5 Year Fund Performance %
Schroder High Yield Opportunities 34.89
L&G High Income Trust 34.22
Fidelity Global High Yield 32.65
AXA Global High Income 32.19
Baillie Gifford High Yield Bond 30.93
Average 27.42

Sterling Strategic Bond

Fund
5 Year Fund Performance %
Allianz Strategic Bond 56.57
Legg Mason IF Brandywine Global Income Optimiser 41.24
GAM Credit Opportunities GBP 37.81
Baillie Gifford Strategic Bond 35.33
Royal London Ethical Bond 33.42
Average 24.36

UK All Companies

Fund
5 Year Fund Performance %
MI Chelverton UK Equity Growth 127.37
VT The Beagle 105.86
Baillie Gifford UK Equity Alpha 74.04
ASI UK Responsible Equity 67.06
Premier Miton UK Growth 65.29
Average 26.96

UK Smaller Companies

Fund
5 Year Fund Performance %
FP Octopus UK Micro Cap Growth 109.85
TB TB Amati UK Smaller Companies 96.71
Liontrust UK Smaller Companies 95.79
Jupiter UK Smaller Companies 86.89
ASI UK Smaller Companies 83.35
Average 53.10