Best-Performing Investment Funds: Strategies For Success

Choosing the best-performing investment fund is a complex task that depends on various factors, including investment goals and risk appetite. While past performance doesn't guarantee future results, analysing the top-performing funds can provide valuable insights for investors. Here's an introduction to the topic of the best-performing investment funds and some key considerations.

The performance of investment funds varies across different time frames and market conditions. Some funds may excel in the short term, while others demonstrate consistent returns over a longer period. When evaluating investment funds, it's essential to consider their returns over multiple periods to make an informed decision. Additionally, different funds may have different investment strategies, focusing on specific sectors, countries, or commodities. Understanding the investment strategy and aligning it with your own goals is crucial.

Diversification is another critical aspect. Diversified portfolios that spread investments across various assets, sectors, and regions can help mitigate risk. It's important to remember that investing carries inherent risks, and past performance doesn't guarantee future success. Conducting thorough research, diversifying investments, and regularly reviewing and adjusting your portfolio are essential steps in managing your investment journey.

Best-performing funds in 2023

The best-performing funds in 2023 were a mix of equity and bond funds, with a focus on technology and artificial intelligence. Here is a list of the top-performing funds in 2023:

• Baillie Gifford American: This fund posted a return of 25.5% in the first half of 2023, a strong recovery after a difficult 2022 where it lost more than 50%.
• T. Rowe Price US Large Cap Growth Equity: This fund returned 22.9% in the first half of 2023.
• Sanlam Global Artificial Intelligence: With a return of 21.6% in the first six months of 2023, this fund benefited from the surge of interest in Artificial Intelligence.
• Invesco Global Focus: This fund was among the top performers in 2023, but the exact returns are not available.
• Fidelity Global Technology: This fund was among the top performers in the technology sector in 2023, but the exact returns are not provided.
• AXA Framlington Global Technology: This fund was also a top performer in the technology sector for 2023, however, the exact returns are not mentioned.

Other notable funds that performed well in 2023 include Guinness Global Innovators, FTF Martin Currie US Unconstrained, BlackRock Global Unconstrained Equity, AXA Framlington American Growth, Comgest Growth Europe ex UK, LF Blue Whale Growth, and abrdn Latin American Equity.

When considering investment funds, it is important to evaluate various factors such as performance, fees, investment objectives, risk tolerance, and professional management. Diversification, affordability, and liquidity are also key advantages of investing in mutual funds.

Best-performing funds in 2024

As of November 2024, here are some of the best-performing funds:

Best S&P 500 Index Funds:

• Fidelity ZERO Large Cap Index (FNILX): This mutual fund has no expense ratio, meaning every $10,000 invested costs $0 annually. It has a 5-year annualized return of 15.7%.
• Vanguard S&P 500 ETF (VOO): Backed by Vanguard, one of the powerhouses of the fund industry, this fund has an expense ratio of 0.03%. It has a 5-year annualized return of 15.6%.
• SPDR S&P 500 ETF Trust (SPY): The granddaddy of ETFs, this fund is sponsored by State Street Global Advisors and has an expense ratio of 0.095%. It has a 5-year annualized return of 15.6%.
• IShares Core S&P 500 ETF (IVV): Sponsored by BlackRock, one of the largest fund companies, this fund has an expense ratio of 0.03%. It has a 5-year annualized return of 15.6%.
• Schwab S&P 500 Index Fund (SWPPX): Sponsored by Charles Schwab, this fund has an expense ratio of 0.02%. It has a 5-year annualized return of 15.6%.

Best Nasdaq Index Funds:

• Shelton NASDAQ-100 Index Direct (NASDX): This fund tracks the performance of the largest non-financial companies in the Nasdaq-100 Index, which are primarily tech companies. It has an expense ratio of 0.52%. It has a 5-year annualized return of 17.9%.
• Invesco QQQ Trust ETF (QQQ): This fund tracks the performance of the largest non-financial companies in the Nasdaq-100 Index and is managed by Invesco, a fund giant. It has an expense ratio of 0.20%. It has a 5-year annualized return of 21.1%.

Other Top Index Funds:

• Vanguard Russell 2000 ETF (VTWO): This fund tracks the Russell 2000 Index, a collection of about 2,000 of the smallest publicly traded companies in the US. It has an expense ratio of 0.10%. It has a 5-year annualized return of 8.8%.
• Vanguard Total Stock Market ETF (VTI): This fund covers the entire universe of publicly traded stocks in the US, including small, medium, and large companies across all sectors. It has an expense ratio of 0.03%. It has a 5-year annualized return of 14.9%.
• SPDR Dow Jones Industrial Average ETF Trust (DIA): This fund tracks the 30-stock index of large-cap stocks in the Dow Jones Industrial Average. It has an expense ratio of 0.16%. It has a 5-year annualized return of 11.3%.

Best Mutual Funds for November 2024:

• Fidelity Select Semiconductors
• Fidelity Series Growth Company
• Fidelity Growth Company Fund
• Fidelity Select Technology
• Fidelity Series Blue Chip Growth
• Fidelity Blue Chip Growth
• Columbia Seligman Tech & Info Adv

Best-Performing Funds in H1 2024:

• Neuberger Berman 5G Connectivity Fund: This fund has grown 30.45% in the first half of 2024, outperforming the average fund in its category.
• Janus Henderson Global Technology Leaders Fund: This fund has grown 29.96% in the first half of 2024, outperforming the average fund in its category.
• Alger SICAV - Alger Focus Equity Fund: This fund has grown 28.86% in the first half of 2024, outperforming the average fund in its category.

Best-performing funds by sector

The best-performing funds by sector depend on the specific timeframe being considered. Here is a list of some of the best-performing funds across various sectors:

• Technology & Technology Innovation: The IA Technology & Technology Innovation sector has delivered the highest average returns over the past 5 years (72.79%). However, only 16.7% of the 24 funds in this sector consistently outperformed.
• Global: With 490 funds, the IA Global sector is the largest available to UK investors. 13.5% of the funds in this sector consistently outperformed over the past 1, 3, and 5 years.
• UK All Companies: This sector includes 234 funds with £138.9 billion in assets under management. 18.8% of these funds have achieved top-quartile performance over the past 1, 3, and 5 years.
• Europe ex-UK: The Europe ex-UK equity sector provides exposure to European companies while limiting UK exposure. 15% of the 133 funds in this sector have consistently ranked among the top quartile for performance over the past 1, 3, and 5 years.
• North American: The North American equity sector represents a significant allocation for growth-oriented portfolios. Over the past 5 years, the sector has delivered an average return of 59.71%, the second-highest of all sectors. However, only 12% of funds have achieved top-quartile rankings over the past 1, 3, and 5 years, while 61% consistently underperformed.
• Emerging Markets: Emerging market equities provide access to rapidly growing economies but carry higher volatility. 17% of the 159 funds in this sector have consistently outperformed over the past 1, 3, and 5 years, while 67% consistently underperformed.

Additionally, here are some of the top-performing funds across various sectors as of 2023:

• Amundi MSCI Semiconductors ESG Screened GBP ETF (CHIP): This fund tracks the performance of semiconductor companies across developed and emerging markets. It has delivered a one-year return of over 40% and a five-year return of more than 130%.
• Artemis SmartGARP European Equity I Acc: This fund invests in growth companies across Europe (excluding the UK) and is well-diversified by sector. It has achieved a one-year return of 16% and a five-year return of 44%.
• IShares MSCI Poland UCITS ETF GBP (SPOL): This fund tracks the performance of the largest companies in Poland. It has achieved a one-year return of 35% but had a negative return of 25% in 2022.
• JPMorgan Emerging Europe Middle East & Africa Securities plc (JEMA): This fund invests in companies based in emerging Europe, the Middle East, and Africa. It delivered a negative return of almost 90% in 2022 due to its focus on Russian securities but has since recovered, delivering a positive return of nearly 50% over the last year.
• Man GLG Sterling Corporate Bond Professional C Acc: This fund invests in corporate bonds, with a focus on sterling-denominated bonds. It achieved a negative return of 12% in 2022 but has rebounded with a return of 20% over the last year.
• Manchester & London Investment Trust plc (MNL): This trust invests in global equities, with a focus on large-cap companies in the information technology and communications sector. It has delivered a one-year return of 32% and a five-year return of 21%.
• Natixis Loomis Sayles U.S. Equity Leaders GBP: This fund invests primarily in large-cap US companies, with a focus on the information technology and communications sectors. It has achieved a five-year return of almost 100% and a one-year return of 30%.
• Ninety One UK Special Situations I Acc GBP: This fund invests primarily in companies headquartered or with significant economic exposure to the UK. It has delivered a one-year return of 19% and a five-year return of 26%.
• Premier Miton UK Money Market B Inc GBP: This fund is a money market fund that invests in government bonds and currency derivatives. It aims to deliver higher returns than savings accounts with lower risk than equities. It has achieved a one-year return of 5% and a five-year return of 7%.
• TT Asia Pacific Equity H Inc GBP: This fund invests in a concentrated portfolio of large-cap companies across Asia, excluding Japan. It has achieved a one-year return of 16% and a five-year return of 26%.

Best-performing funds by region

North America

The North American sector is one of the most competitive markets for investment funds, with 1,126 funds classified within the IA North America and IA North American Smaller Companies sectors. Here are some of the best-performing funds in this region:

• Artemis US Select
• AXA Framlington American Growth
• HSBC American Index
• Legg Mason IF Martin Currie North American
• M&G North American Dividend

Europe

Europe-stock portfolios invest at least 70% of their total assets in equities, with at least 75% of stock assets in Europe. The best-performing funds in this region include:

• Brown Advisory - WMC Strat Eurp Eq Fd
• ProFunds Europe 30 Fund
• Janus Henderson European Focus Fund
• JPMorgan Europe Dynamic Fund
• DFA Continental Small Company Portfolio

Latin America

Latin America stock portfolios invest almost exclusively in stocks from Latin America, with a strong focus on the region's large markets such as Brazil, Mexico, and Argentina. The top-performing funds in this region include:

• DWS Latin America Equity Fund
• T. Rowe Price Latin America Fund
• Fidelity® Latin America Fund
• OTG Latin America Fund

Asia/Pacific

Diversified Pacific/Asia stock portfolios have a wide investment range and can invest throughout the Pacific Rim, including Australia and New Zealand. Here are some of the best-performing funds in this region:

• Fidelity® Pacific Basin Fund
• Matthews Asia Dividend Fund
• Matthews Asia Growth Fund
• Vanguard Pacific Stock Index Fund

Middle East and Africa

African nations are among the fastest-growing economies in the world. Here are some of the top-performing funds in the Middle East and Africa region:

• BPI Global Investment Fund
• JP Morgan Africa Equity
• Russell - Old Mutual African Frontiers
• Sanlam African Frontier Markets
• T. Rowe Price Middle East & Africa Equity

Best-performing funds by asset class

When it comes to the best-performing funds by asset class, a few key factors come into play. Firstly, it's important to note that the best-performing asset class one year may not be the best the next. Therefore, investors should consider diversifying their capital across different asset classes to manage investment risk. With that in mind, here's an overview of the top-performing funds by asset class:

Stocks

Stocks are generally considered a volatile asset class, but they have historically offered high potential returns. According to Yale University's Crash Confidence Index, stocks outperformed both cash and the 10-year treasury for most of the period between 2012 and 2022. During the COVID-19 pandemic, the stock market took a significant hit, but it also demonstrated its ability to recover swiftly, with US markets returning to pre-pandemic highs by November 2020.

Cash

Cash is a relatively stable asset class, and while it may not offer the same high returns as stocks, it has its place in an investment strategy. In 2018 and 2022, cash pulled ahead of stocks and the 10-year treasury in terms of performance.

10-Year Treasury

The 10-year treasury is a type of government bond with a fixed interest rate and a maturity of 10 years. While it generally performs better than cash over the long term, it only outperformed stocks once during the 10-year period between 2012 and 2022.

Gold and Precious Metals

Gold and precious metals are often seen as safe-haven investments during times of economic uncertainty. For example, during times of falling interest rates or geopolitical tensions, gold tends to perform well. The SVS Baker Steel Gold & Precious Metals fund is a top performer in this asset class, consistently ranking among the top 10 performers over various time frames.

Technology and Innovation

The IA Technology and Technology Innovation sector has been a strong performer, with an average return of 22.7% for investors in 2023, largely due to the surge in interest in Artificial Intelligence. Funds like L&G Global Technology Index, Fidelity Global Technology, and Sanlam Global Artificial Intelligence have been top performers in this sector.

China

China-focused funds have seen strong performance, with several making the list of top performers over the past year. Funds like GAM Multistock China Evolution, GAM Star China Equity, and Fidelity China have offered attractive returns. However, it's important to note that China's market can be volatile, and its performance may not always be consistent.

Remember, when investing, it's crucial to consider your investment goals, risk tolerance, and time horizon. Diversification across asset classes can help manage risk and smooth out performance over time.

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