The best performing funds to invest in right now

15 min Read Published: 04 Mar 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 March 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 March 2006 to March 2016 (out of 132) Performance rank March 2016 to March 2021 (out of 230)
Slater Growth 1 6
ASI UK Unconstrained Equity 2 155
Franklin UK Mid Cap 3 56
Liontrust Special Situations 4 17
Threadneedle UK Mid 250 5 102
BMO UK Mid-Cap 6 167
SVM UK Growth 7 61
Marlborough Multi-Cap Growth 8 20
Schroder UK Opportunities 9 180
EdenTree Responsible and Sustainable UK Equity Opportunities 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 3rd March 2021.

The top-performing funds over 10 years

Asia Pacific Excluding Japan

Fund 10 Year Fund Performance %
Baillie Gifford Pacific 379.44
Schroder Asian Alpha Plus 231.52
Barings Eastern Trust 211.57
Merian Asia Pacific 210.67
Allianz Total Return Asian Equity 205.74
Average 150.32

Europe Excluding UK

Fund 10 Year Fund Performance %
Baillie Gifford European 290.62
BlackRock European Dynamic 237.65
Marlborough European Multi-Cap 228.27
Allianz Continental European 218.21
BlackRock Continental European 198.61
Average 117.48

Japan

Fund 10 Year Fund Performance %
Legg Mason IF Japan Equity 633.71
Baillie Gifford Japanese 239.01
JPM Japan 221.10
Fidelity Japan Smaller Companies 176.19
AXA Framlington Japan 175.47
Average 141.03

Mixed Investment 0%-35% Shares

Fund 10 Year Fund Performance %
Omnis Investments Ltd Omnis Managed Cautious 79.03
Sarasin Income & Reserves 68.88
Fidelity Multi Asset Income 62.00
Threadneedle Managed Bond Focused 59.72
BM Brooks Macdonald Defensive Income 57.72
Average 45.40

Mixed Investment 20%-60% Shares

Fund 10 Year Fund Performance %
Royal London Sustainable Diversified Trust 144.16
AXA Global Distribution 104.64
Premier Miton Multi-Asset Distribution 93.63
Premier Miton Multi-Asset Monthly Income 87.92
M&G Episode Income 86.31
Average 61.64

Mixed Investment 40%-85% Shares

Fund 10 Year Fund Performance %
Royal London Sustainable World Trust 254.04
Baillie Gifford Managed 211.44
Liontrust Sustainable Future Managed 187.10
COIF Charities Investment 155.45
Omnis Investments Ltd Omnis Managed Adventurous 143.57
Average 88.57

North America

Fund 10 Year Fund Performance %
Baillie Gifford American 885.02
UBS US Growth 414.03
AXA Framlington American Growth 373.83
Franklin US Opportunities 345.65
Merian North American Equity 336.04
Average 273.24

Sterling Corporate Bond

Fund 10 Year Fund Performance %
Janus Henderson Inst Long Dated Credit 113.29
Schroder Sterling Corporate Bond 97.72
Royal London Corporate Bond 87.27
L;G Managed Monthly Income Trust 84.69
Morgan Stanley Sterling Corporate Bond 82.32
Average 66.17

Sterling High Yield

Fund 10 Year Fund Performance %
Invesco High Yield (UK) 81.85
Baillie Gifford High Yield Bond 75.81
AXA Global High Income 75.00
Schroder High Yield Opportunities 73.77
AXA Pan European High Yield Bond 72.04
Average 61.40

Sterling Strategic Bond

Fund 10 Year Fund Performance %
Allianz Strategic Bond 103.09
Baillie Gifford Strategic Bond 86.67
Royal London Ethical Bond 85.49
Artemis High Income 84.76
Fidelity Extra Income 73.71
Average 57.30

UK All Companies

Fund 10 Year Fund Performance %
Merian UK Mid Cap 252.78
Slater Growth 237.44
Premier Miton Ethical 206.63
Liontrust Special Situations 198.85
Barclays UK Lower Cap 196.94
Average 93.63

UK Smaller Companies

Fund 10 Year Fund Performance %
Liontrust UK Smaller Companies 368.33
ES R&M UK Equity Smaller Companies 360.21
LF Gresham House UK Micro Cap 341.85
Marlborough UK Micro Cap Growth 303.66
AXA Framlington UK Smaller Cos 293.85
Average 207.38

The top-performing funds over 5 years

Asia Pacific Excluding Japan

Fund 5 Year Fund Performance %
Baillie Gifford Pacific 245.85
JPM Asia Growth 185.83
Fidelity Asia Pacific Opportunities 159.45
Barings Eastern Trust 158.83
Schroder Asian Alpha Plus 156.17
Average 112.09

Europe Excluding UK

Fund 5 Year Fund Performance %
Premier Miton European Opportunities 183.52
Baillie Gifford European 155.43
Marlborough European Multi-Cap 133.32
BlackRock European Dynamic 119.90
BlackRock Continental European 110.45
Average 64.66

Japan

Fund 5 Year Fund Performance %
FSSA Japan Focus 131.58
Legg Mason IF Japan Equity 123.28
Baillie Gifford Japanese 112.58
JPM Japan 98.09
Liontrust Japan Equity 93.14
Average 70.40

Mixed Investment 0%-35% Shares

Fund 5 Year Fund Performance %
Royal London Sustainable Managed Growth Trust 43.91
Omnis Investments Ltd Omnis Managed Cautious 34.86
True Potential Investments SVS TPI Cautious 1 32.12
BlackRock NURS II Consensus 35 32.07
True Potential Investments SVS TPI Cautious 3 30.69
Average 22.49

Mixed Investment 20%-60% Shares

Fund 5 Year Fund Performance %
Royal London Sustainable Diversified Trust 67.67
Liontrust Sustainable Future Defensive Managed 55.78
AXA Global Distribution 51.63
Barclays Wealth Global Markets 3 49.87
Rathbone Active Income and Growth Fund 47.89
Average 29.36

Mixed Investment 40%-85% Shares 

Fund 5 Year Fund Performance %
Baillie Gifford Managed 117.46
Royal London Sustainable World Trust 106.73
Liontrust Sustainable Future Managed 96.94
Liontrust Balanced 81.14
Premier Miton Diversified Growth 80.11
Average 46.10

North America

Fund 5 Year Fund Performance %
Baillie Gifford American 439.01
AXA Framlington American Growth 168.41
UBS US Growth 166.64
Ninety One American Franchise 152.68
Franklin US Opportunities 150.90
Average 112.45

Sterling Corporate Bond

Fund 5 Year Fund Performance %
Schroder Sterling Corporate Bond 53.52
Janus Henderson Inst Long Dated Credit 48.38
Merian Corporate Bond 36.50
Liontrust Sustainable Future Corporate Bond 36.36
Rathbone Ethical Bond Fund 36.06
Average 27.15

Sterling High Yield

Fund 5 Year Fund Performance %
Schroder High Yield Opportunities 44.41
L&G High Income Trust 43.70
AXA Global High Income 40.08
Fidelity Global High Yield 38.09
Baillie Gifford High Yield Bond 36.59
Average 32.15

Sterling Strategic Bond

Fund 5 Year Fund Performance %
Allianz Strategic Bond 53.64
GAM Credit Opportunities GBP 43.25
Legg Mason IF Brandywine Global Income Optimiser 40.03
Aegon Strategic Bond 39.32
Schroder Strategic Bond 38.94
Average 25.24

UK All Companies

Fund 5 Year Fund Performance %
MI Chelverton UK Equity Growth 158.95
VT The Beagle 128.36
Slater Recovery 97.93
Baillie Gifford UK Equity Alpha 95.56
Premier Miton UK Growth 79.78
Average 37.53

UK Smaller Companies

Fund 5 Year Fund Performance %
FP Octopus UK Micro Cap Growth 174.08
TB TB Amati UK Smaller Companies 132.32
Liontrust UK Smaller Companies 119.18
Marlborough UK Micro Cap Growth 117.77
Jupiter UK Smaller Companies 114.61
Average 76.59