The best performing funds of the 2010s

Which investments were the standout performers of an eventful decade?

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  1. Rob Morgan

As 2019 ends so does a decade of market events and ups and downs to look back on. There were some uncomfortable times for sure, but in general, it was an excellent period for investors as most asset classes flourished.

The 2010s were characterised by a strong recovery from the 2008 global financial crisis that caused the deepest recession in living memory. The effect of central bank attempts to stimulate the economy resulted in economic growth getting back on track. Low interest rates and injections of money into the financial system restored confidence and ultimately benefited many businesses, although we still live with the legacy of this today through high levels of government debt.

The US economy recovered faster and further from the slump than the other advanced economies. It also fostered the star technology companies of the western world including Apple, Google, Facebook, Amazon and Netflix. Faster growth and technological dominance led to significant outperformance the US stock markets and from US and technology funds.

AXA Framlington Global Technology was the top tech fund over the decade, benefitting from holding a variety of leading stocks over the period including Apple and Google (now Alphabet). The top-performing US fund, Baillie Gifford American, also benefitted from a bias to the tech sector as well as growth-orientated investments generally.

While not a technology fund, Legg Mason IF Japan Equity, which invests heavily in emerging Japanese technology companies, came out as the top performer. The fund’s sector bias is a result of a longstanding investment theme the manager Hideo Shiozumi characterises as investing in the ‘New Japan’, focusing on high growth parts of the economy including robotics and healthcare. Remarkably, it turned an investment of £1,000 into around £8,000 over the decade – although past performance is not an indicator of future returns, and the fund is notoriously volatile having also undergone periods of significant underperformance versus the broader Japanese market.

It wasn’t just about tech funds, though. A number of UK smaller company funds such as TB Amati UK Smaller Companies and Slater Growth also provided stellar returns despite the turbulent political backdrop of the EU referendum and subsequent Brexit-related uncertainty. This highlights the sometimes-overlooked opportunities that exist in this area, as well as the stock picking prowess of some of the fund managers that operate in it.

Table: Top ten onshore retail funds over ten years

Past performance is not a reliable indicator of future returns. Figures are shown on a % total return basis, bid to bid price with net income reinvested; Source: FE Analytics, data for ten-year performance: 01/01/2010 to 01/01/2020. Onshore and retail open-ended funds only.

Past performance is not a reliable guide to future returns. This website is not personal advice based on your circumstances. No news or research item is a personal recommendation to deal. Investment decisions in fund and other collective investments should only be made after reading the Key Investor Information Document or Key Information Document, Supplementary Information Document and Prospectus. If you are unsure of the suitability of your investment please seek professional advice.

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