Fidelity’s emerging markets and Japanese index fund fell out of Bestinvest’s best funds list after both underperformed their benchmark in 2022.
Five other funds dropped out of the annual list, including the Liontrust Sustainable Future Monthly Income Bond, and CT UK Equity Income.
Changes since December 2022
Newcomers Article continues after advert | Drop-outs |
Allianz Technology Trust | TM Tellworth UK Smaller Companies |
Murray Income Trust | Liontrust Sustainable Future Monthly Income Bond |
Fulcrum Diversified Absolute Return | Fidelity Emerging Markets |
Ninety One Global Environment | Fidelity Index Japan |
Fidelity European | FP WHEB Sustainability |
CT UK Equity Income | |
TM CRUX European Special Situations |
The Fidelity Emerging Markets fund lost 25.3 per cent in 2022, compared with a 15.3 per cent loss by its benchmark and the wider global emerging markets equity sector losing 13.2 per cent.
The other fund removed from the list is Fidelity’s Index Japan fund, which tracks the performance of the MSCI Japan index, which lost 6.8 per cent in 2022.
Index funds are taken off the list if another lower-cost version of the same tracker is found, or if the underlying index is not the best approach for that market.
Bestinvest’s best funds
Sector | Top Funds |
|
|
UK Equities - Growth | Mercantile Investment Trust | Liontrust UK Growth | Premier Miton UK Growth |
UK Equities - Income | BlackRock UK Income | Montanaro UK Income | |
Target Absolute Return and Multi-Asset | Lazard Rathmore Alternative | TM Fulcrum Diversified Absolute Return | Trojan Fund |
Fixed Income | Janus Henderson Strategic Bond | TwentyFour Absolute Return Credit |
|
Europe | Barings Europe Select Trust | BlackRock Continental European Income | BlackRock European Dynamic |
Japan | Jupiter Japan Income | JPM Japan | iShares Japan Equity Index |
Global Emerging Markets and Asia Pacific | Aubrey Global Emerging Markets Opportunities | Stewart Investors Asia Pacific Sustainability | Schroder ISF Asian Total Return |
North America | Premier Miton US Opportunities | Findlay Park American Fund | Loomis Sayles US Equity Leaders |
Global | GuardCap Global Equity | Brown Advisory Global Leaders |
|
Ethical and Sustainable | Guinness Sustainable Energy | Ninety One Global Environment | CT Responsible Global Equity |
Real Assets | 3i Infrastructure | International Public Partnerships |
Source: Bestinvest
The list is broken down into 12 sectors within which the firm's 300-strong investment team have selected their top two to three funds, as well as a number of fund tables.
The criteria used for judging include managers who are not constrained by “hugging benchmarks”, who personally invest in their own funds and are willing to limit the size of their funds if this starts to hamper the way it is managed.
Some 127 investments appear on the list, covering 30 listed investment trusts, 10 exchange-traded funds and two exchange traded commodities.
One of the new trusts on the list is Abrdn’s £1.17bn Murray Income Trust.
The trust has returned below its benchmark in the past year, with its net asset value dropping 6 per cent, compared with a 0.3 per cent rise from the FTSE All-Share.
Managed by Charles Luke, the trust is ahead on a five-year basis, beating its benchmark by more than 15 percentage points, and it is currently trading on a 5.1 per cent discount to NAV.
sally.hickey@ft.com
