AND:Best performing funds December 23, 2022
2022 was a year to forget for most investors as global equities dropped 20% year over year (FTSE All World Index). Everything from inflation to energy prices, rising interest rates, the war in Ukraine and global economic and political uncertainty have caused world markets to plummet beyond anything seen in this century. But while almost all major markets are showing negative returns, there are some niche sectors and a portion of funds in these sectors managed to prosper and end the year with strong growth in returns.
In this report, we analyze 3,883 funds and present the 10 best performing funds of 2022. We also identify the 10 best performing funds across 6 major asset classes and list the performance of 56 investment sectors from start to finish.
About this review
For this analysis, we reviewed the performance of 3,883 funds ranked by sector across 56 investment sectors. We identify the 10high yield fundsfor the year and includes 10 funds across all major asset classes that were ranked best in their industry for 2022 performance.
We will also average the overall performance of the 56 investment sectors and determine which sectors performed best and worst over the past 1, 3, 6 months and 1, 3, and 5 years.
The funds in the table above represent the top 10 funds with the highest growth returns from an analysis of 3,883 funds over the last 12 months. As the table shows, 7 of the top 10 funds are within the ranking, which is not surprising, considering that energy prices have risen sharply since the beginning of the war in Ukraine. As funds from this sector are heavily invested in energy companies, they are among the few sectors that have seen average growth this year.
The other 3 backgrounds in the table are all destined for the specialties sector. One (Goldman Sachs North American Energy & Infrastructure Equity Portfolio) also benefited from large holdings in energy and infrastructure companies.
The remaining 2 funds are passive funds that track the MSCI Turkey index, so their performance is very similar. This index is designed to measure the performance of the large and mid-cap segments of the Turkish market. With 12 components, the index covers approximately 85% of the stock universe in Turkey.
As the table above shows, it was a small selection of markets and sectors that produced the year's best returns. However, as we note in our industry analysis later in this report, the fund's huge gains inseems to have reached its peak. While the sector was by far the fastest growing sector of the year, over the last 3 months the sector ranked 11th out of 56 sectors with an average return over the period of -0.31% and 35th over the last month with growth average of 1.6. % for the period. In contrast, UK and European equities outperformed the sector average in the final quarter of the year as signs of a market recovery increased.
The best UK mutual funds
The UK equity market had a particularly difficult first half of the year, with average returns of -10% over the period. Despite high volatility and political uncertainties, UK equities rebounded with a more positive market outlook on the horizon. Over the year, a number of UK equity funds weathered tough market conditions better than their peers, with the 10 funds ranked in the table below as the best performing UK equity funds for 2022.
The UK stock market is represented by three specific sectors: the UK equity sector, the UK all company sector and the UK smaller company sector. The 10 funds that make up the year's top UK equity funds come from both the UK equity sector and the UK corporate sector, which although similar in core composition, have subtle differences.
UK equity sector:
- have more than 80% invested in UK listed equities;
- an investment objective/policy to achieve capital and income growth returns;
- most investments in mid to giant capitalization companies;
- no more than 75% of expenses charged to the capital or income account;
- a portfolio or dividend yield close to the mid-market yield;
- and a British reference
Sector of all UK companies:
- have more than 80% invested in UK listed equities;
- an investment objective/policy to achieve the most growth returns on capital;
- most investments in mid to giant capitalization companies;
- most capital expenditures; AND
- a british mark
The best performing UK equity fund was the Quilter UK Equity Large Cap Value Fund, which was up 15.44% year-to-date, which was very impressive, especially considering the industry average of 2.55%. Unlike other funds featured in this report, this fund consistently ranks highly in its sector. While the UK equity market is serviced by over 100 fund management companies, 6 of the top 10 top performing UK equity funds are managed by just 3 fund managers: Quilter Investors, BNY Mellon and Invesco each one with 2 funds in the top 10, demonstrating particular experience of the UK equity market reflects.
The best European equity funds
Over the past 12 months, the Europe ex UK investment sector ranked 23rd out of 56 sectors, with a negative average return of -6.63%. Europe suffered the consequences of the invasion of Ukraine by Russia, but the region quickly adapted to the economic threats, which was reflected in the performance of European stock markets in the last quarter of the year, with the European sector ex-United Kingdom recording an average of 1.5% got the highest score. Return of the 56 sectors in the period by 4.86%.
However, despite negative sector average returns for the year, a small proportion of European funds returned to growth. In the table below we present the top 10 European equity funds, each of which produced positive returns over the year and a portion also managed to outperform the sector over 3 and 5 years.
European fund LF Brook Continental posted the strongest growth of all European equity funds in 2022. Despite consistently strong performance, the fund is under-represented in UK investors' portfolios, as the fund itself is only £150m in assets under management.
The largest of the 10 funds is the European fund LF Lightman, with £497m in assets under management. This fund is also the lowest priced with annual fees of 0.80%, with total annual fees averaging 0.96% for the 10 funds.
Also in the top 10 is the Liontrust European Dynamic Fund with a 1-year return of 3.16%. This fund consistently ranks at the top of the industry and is the fastest growing fund in the industry over the past 5 years with a return of 61.06%.
The best global equity funds
Global equity funds invest in a wide range of stocks in world markets, and this broad approach can help minimize the impact of stock market shocks on a portfolio.
Attracted by its regional diversity, the global sector has become the most heavily invested sector in the market, with over £155 billion of investor money currently under management across the sector's 463 funds.
Broad sector criteria mean that funds in this sector are eligible to hold shares in companies across a wide range of sectors, and the best performing funds in this sector are, unsurprisingly, those with higher asset allocations in energy and global infrastructure companies. . .
The best performing fund in the global sector this year was the Schroder ISF Global Energy Fund. Although allocated to the global sector, the fund mainly consists of positions in ccomfort and energyCompanies that are the markets that have benefited the most from years of high volatility and general economic uncertainty.
Fidelity Global Industrials was the highest rated fund in the top 10 with 5 stars. The fund has consistently ranked among the top performers in the global industry and has done so by taking moderate risks compared to many of its peers.
North America's Best Equity Mutual Funds
The US sector is an important asset class that is likely to form an integral part of many medium to high risk investment portfolios.
Over the past 5 years, the US equity industry has produced an average return of 67.17%, which was the second highest of the 56 sectors, and over 10 years has produced the highest return, averaging 259%.
The North American sector is one of the most competitive in the market, with 210 outstanding funds in the sector's ranking. Like many other sectors, the US sector has seen year-on-year losses, but as can be seen from the table below, several funds still managed to achieve high levels of growth.
The best performing US equity fund in 2022 was the Quilter Investors US Equity Fund, with an impressive return of 21.04%, well above the industry average of -6.63%. The fund invests primarily in technology and industrial companies, but is also diversified into healthcare, energy and financial services, which has helped it weather the challenges of the years better than most.
Another fund ranked among the top US funds was the BNY Mellon US Equity Income Fund. The fund has performed similarly to the Quilter US Equity Income Fund over the past 1 and 3 years, but is a more established fund with a 5+ year history. However, the fund has a higher than industry average annual fee of 0.89% (industry average annual fee is 0.69%).
The best Asian stock funds
ANDThe Asia excluding Japan sector includes the economic area of countries located in Asia but excluding Japan. These countries are generally consideredarisingGot thatand are generally only suitable for investors who are looking for high-growth investment opportunities and have a higher tolerance for risk.
The sector itself was one of the hardest hit in 2022, with a negative average annual return of -9.63%. Of the 111 funds ranked in this sector, only 18 managed to record positive returns for the year, with the top 10 performers listed below.
The 5-star Jupiter Asian Income Fund was not only the best performing Asian equity fund of 2022, it has also been one of the best performing funds in the industry for 3 and 5 years, consistently. Most of the companies held in this fund are based in Australia, with technology and finance being the main sectors in which it has interests. The fund manages just over £1.1bn of investor money and, with an annual fee of 0.98%, is also just below the industry average of 0.99%.
The Schroder Institutional Pacific Fund performed similarly in this fund, posting 1-, 3-, and 5-year growth of 6.80%, 24.87%, and 42.59%, respectively. This fund also has a 5-star high yield rating and, like the Jupiter Asian Income Fund, invests primarily in Australian companies. But for investors, the key differentiator between this fund and the Jupiter fund is its low annual fee of just 0.55%.
The best emerging markets funds
The term “emerging stocks” refers to publicly traded stocks of companies headquartered in emerging markets. Emerging markets are generally considered to be fast-growing economies that offer higher potential returns but higher risks than developed markets.
Investing in emerging markets is generally reserved for riskier investment portfolios, but it is not uncommon for intermediate portfolios to contain a small proportion of holdings in emerging market funds due to the growth potential they offer.
The sector's riskier nature was evident last year as it posted average losses of -13.89% and ranked 46th out of 56 sectors. As a result of the high volatility the sector has experienced over the past year, only 3 of the 148 funds in the sector have seen growth of 1% or more over the period.
Invesco Emerging Markets ex China Fund was easily the best performer of the year, returning 30.60%. Second on the list was the BNY Mellon Emerging Income Fund which, while its 1-year growth of 5.45% was well below the Invesco fund, has a much better 3- and 5-year track record, which is remarkable. of the emerging market highlights the experience of the fund manager
The best performing investment sector
Our analysis of 3,883 funds and the 56 sectors they fall into showed that they had average annual losses of -7.18%. A small selection of sectors such as Materials & Resources and Latin American sectors saw strong growth on average, but some sectors such as UK Index Linked Gilts and Technology had a hot year with negative average returns of -32.78% and - 26.15%, respectively.
While in this report we highlight the year's best performing funds across key equity sectors, the year was characterized by overall underperformance. But on the positive side, many funds are now undervalued and have significant growth potential when market stability returns. 2022 is a year to forget for investors, and despite continuing political and economic woes, many analysts and economists expect 2023 to be a year of return to growth.
A balanced investment approach
Investing, like many aspects of life, is not always easy and for some it can be more uncomfortable and stressful than for others. As an investor, you are always exposed to factors that can cause stocks to rise or fall.
Investing can lead to emotional decisions, but the investors who reach their goals efficiently are often those who have a disciplined, pragmatic approach to investing and follow a structured long-term strategy. If this is followed, better results can be obtained.
Innovator for investors
The development of our portfolios is based on years of research and analysis, which has included constant evaluation of over 100 fund managers, tens of thousands of funds and over 30,000 investment portfolios.
Our research also shows that a small subset of funds and fund managers have consistently outperformed, with over 90% of the portfolios we analyzed containing consistently underperforming funds.
This research allowed us to identify efficient processes and quality investments that we used to create 10 strategically balanced, risk-weighted portfolios, built with only the best funds within each asset class, offering investors phenomenal growth potential.
Yodelar offers an advisory and information service that is changing the way investors think.
Book a no-obligation conversationContact our team today and find out how we can help you efficiently grow your wealth.
