The best and worst-performing funds of 2023

Each week we provide our members with up-to-date performance data on a wide range of funds. We do not guarantee that we include all funds, but we certainly cover most UK-domiciled funds available through the most-popular fund supermarkets.

We arrange them in their Investment Association (IA) sectors and then combine the sectors to form our own Saltydog groups.

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We use the historic volatility of the sectors to determine which group they end up in. The least volatile sectors are in the “Safe Haven” group. Then there is the “Slow Ahead” group, followed by “Steady As She Goes”, and finally the two “Full Steam Ahead” groups. We report on the Specialist sectors separately.

The groups can be used to help control the overall volatility of a balanced portfolio.

As momentum investors, we are looking for trends in the markets and focus on the relative performance of the sectors. We believe that these reflect the underlying macro-economic conditions around the world. Having selected which sectors to invest in, choosing the best-performing funds is relatively straightforward.

Because our main focus is on the sectors, and we only ever look at the leading funds, it is easy to lose sight of the variance in performance of the funds in each sector. We have examined our analysis for last year and picked out the best and worst fund for each sector. The results are shown in the table below.

Data source: Morningstar. Past performance is not a guide to future performance.

(*There are some bond sectors where we track only one or two funds, so we have combined all the non-UK bond sectors into our Global & Global Emerging Market Bonds sector).

The “Safe Haven” group only contains two sectors, Short Term Money Market and Standard Money Market. There are very strict rules determining what they can invest in, which means the performance of all the funds is usually fairly similar. Last year the best-performing fund in this group was Royal London Short Term Money Market, up 4.8%, and the worst was BlackRock Cash, but it still went up by 4.6%. The Royal London Short Term Money Market fund was also the best-performing fund in this group in 2022, but then it only went up by 1.4%.

In the “Slow Ahead” group, the best-performing fund last year was the Liontrust Balanced fund from the Mixed Investment 40-85% Shares sector. It rose by more than 20%. The worst-performing fund in the sector, Aegon Sustainable Diversified fell 1.7%. The worst-performing fund in the group was WS Ruffer Total Return, which lost 6.3%.

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The Ninety One UK Special Situations fund, from the UK All Companies sector, was the top fund in the “Steady as She Goes” Group, with an annual return of 27.4%. The worst-performing fund in the group, Premier Miton UK Smaller Companies, fell by 15.7%.

The largest sector variance was in the North American sector. The leading fund, New Capital US Growth, gained nearly 50%, and was the top fund in the “Full Steam Ahead – Developed” group. The worst-performing North American fund, JPM US Equity Income, dropped 1.6%. But that was not the worst fund in the group. That spot was taken by the BNY Mellon Japan Small Cap Equity Focus fund, which fell 16.7%.

The largest group variance was in the “Full Steam Ahead – Emerging” group where the Liontrust Global Technology fund made 58.9% and the abrdn China A Share Equity lost 29.3%.

The best-performing fund from the Specialist sectors was Jupiter India with a one-year return of 31.1%.

The top-performing funds will be familiar to our members. They have regularly appeared in our weekly shortlists, and some still feature in our demonstration portfolios.

For more information about Saltydog, or to take the two-month free trial, go to www.saltydoginvestor.com