Dominance of US and Technology funds continues for a third consecutive year, FE fundinfo research reveals

FE fundinfo, a leading financial data company, today released data showcasing the best performing funds and sectors in 2024. The data reveals that US and technology-focused funds once again delivered exceptional returns, maintaining their dominance for the third consecutive year. Emerging markets, particularly India and China, also performed remarkably, with both appearing in the top five performing sectors. 

Overall, the top three funds for 2024 were Alger Focus Equity (54.53%), JPM Emerging Europe Equity (53.88%) and Alger American Asset Growth (50.55%). 

The data, drawn from trusted fund research and analysis platform FE Analytics, highlights the top-performing funds registered for sales in the UK across four of the key Investment Association universes, as well as the best performing sectors during the same period.* 

Best performing funds 

Sterling Strategic Bond 

In the Sterling Strategic Bond universe, the top-performing fund for 2024 was Man Group Man Dynamic Income, delivering a strong return of 19.03%. Funds in the sector that limited interest rate sensitivity and ventured down the credit spectrum to capture yield outperformed, benefitting from a year when recession fears did not materialise. 

Commenting on the data, Charles Younes, Deputy Chief Investment Officer at FE fundinfo said: “Recession fears loomed over 2024 as bond markets initially priced in multiple rate cuts amid expectations of a central bank pivot. Yet the global economy continued to run at or above its long-term trend, defying pessimistic forecasts. Inflation, however, remained stubbornly above target, forcing central banks to maintain restrictive policies. 

“This backdrop proved challenging for strategic bond managers who bet heavily on rate cuts and recessionary scenarios. Portfolios with high sensitivity to interest rates faced another painful year, underscoring the difficulty of navigating shifting economic conditions.” 

IA Global Equity 

In the IA Global Equity category, the dominance of momentum-factor strategies and US and technology-focused funds continued unabated as they have done since 2023. Funds such as Artemis Global Income I Inc, the top performer in this category with a stellar 26.81% return, and M&G Global Dividend I Acc GBP, which ranked third with a 21.11% return, exemplify this trend. 

Alongside familiar trends, 2024 also saw significant shifts. Equity markets finally broadened, with small-cap stocks joining the rally. This was particularly evident in the second half of the year, with the re-election of President Trump being a pivotal moment that reinvigorated market optimism. 

Charles Younes, Deputy Chief Investment Officer at FE fundinfo, said: “The re-election of President Trump coincided with a surge particularly of US small-cap stocks, which are closely tied to domestic economic policy. The small cap surge narrowed the gap between the S&P 500 Equal Weight Index and its market-cap-weighted counterpart. For investors, this broader rally reduced reliance on a few mega-cap names and provided diversified opportunities across a wider range of industries and market capitalisations.” 

IA Global Emerging Markets 

The IA Global Emerging Markets sector saw a year marked by significant volatility. Throughout 2024, funds in this category faced sharp fluctuations, with country-specific allocation emerging as a decisive factor for performance. At the end of the year, top performers were Carmignac Portfolio Asia Discovery FW GBP Acc at 25.11% and NB Emerging Markets Equity I Acc USD at 21.65% 

A key driver was the late Q3 equity rally in China, where Beijing’s announcement of comprehensive fiscal easing and targeted measures to support property and stock markets revitalised investor sentiment. This policy intervention helped reverse much of the earlier losses in Chinese equities, however volatility remained elevated throughout the year. 

Charles Younes, Deputy Chief Investment Officer at FE fundinfo, commented: “The IA Global Emerging Markets sector underscored the importance of strategic country allocation in 2024. While China’s late-year rally provided a lifeline for many funds, the region’s heightened volatility highlighted the challenges of navigating shifting policy environments and uneven economic recoveries.” 

IA UK All Companies 

Closer to home, the IA UK All Companies sector saw stock selection and improved market sentiment take centre stage as political uncertainty receded. Funds such as Artemis UK Select I Acc and Artemis SmartGARP UK Equity I Acc, which returned 25.30% and 24.54%, respectively, led the sector. 

Charles Younes, Deputy Chief Investment Officer at FE fundinfo, commented: “In the UK, the October Budget announcement triggered a rally in smaller companies, further boosting market breadth. As political uncertainty fell, fundamentals drove performance and active investors delivered stronger returns. Artemis funds outperformed, leveraging their disciplined focus on valuations. This broadening trend is expected to persist into 2025.”  

Best Performing Sectors 

2024 proved to be a rewarding year for risk-tolerant investors, with nine IA sectors delivering double-digit returns. Leading the charge were US and Technology funds, which maintained their dominance for the third consecutive year. Emerging Markets also made a notable comeback in 2024, with Indian and Chinese equities standing out, particularly following Beijing’s fiscal stimulus packages in the latter half of the year. 

“The key themes of the year bear a striking resemblance to 2023, with US equities and technology stocks once again delivering double-digit returns. This recurring outperformance has prompted a sense of déjà vu, alongside familiar critiques from investors sidelined for years: ‘Valuations are too high,’ or ‘A market rotation is imminent.’ 

Charles Younes, Deputy Chief Investment Officer at FE fundinfo, added: “While valuations are a critical component of any investment decision, they must be considered alongside sentiment and fundamentals. The enduring appeal of US equities, particularly in technology, lies in their robust R&D, competitive advantages and unmatched revenue and profitability prospects.” 

*Editor’s Note: All funds analysed by FE fundinfo were registered for sale in the UK, as registered by the Investment Association. More on the IA here.