The FTSE 100 has broken 10,000: which active funds are beating it?

It’s not long ago that the UK stock market was an object of ridicule. Investors have spent many years yanking money from UK funds, and when the FTSE 100’s 40th birthday arrived in early 2024 this invited plenty of jokes about it running into a midlife crisis.

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The index has certainly had some lengthy bouts of bad performance but that has reversed in recent years, as the table shows.

It delivered a stunning 27% return in the year to 12 January 2026 and can now boast a performance roughly in line with the MSCI World index, and only slightly behind the S&P 500, over a five-year stretch.

Source: FE Analytics. Past performance is not a guide to future performance.

Hot streaks like this tend to lead to fresh market highs, and the FTSE 100 duly breached the psychologically important 10,000 mark in early January.

If that turns investors’ heads, they can get exposure easily enough via cheap trackers such as the iShares Core FTSE 100 ETF GBP Dist (LSE:ISF) and HSBC FTSE 100 ETF (LSE:HUKX). With a 0.07% yearly fee, they charge a pittance for very straightforward exposure.

This would currently give you big positions in AstraZeneca (LSE:AZN), HSBC Holdings (LSE:HSBA) and Shell (LSE:SHEL), generous allocations to financials, industrials, consumer staples and healthcare, and a trailing 12-month yield of around 3%.

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There’s plenty to like here, but it’s worth noting that active UK equity funds have been no slouch. Plenty of names have returned substantially more than the FTSE 100.

These funds have some notable quirks. Investors would do well to understand how they fit together, and whether to diversify beyond them.

The top names

Of 300 funds in the Investment Association (IA) and Association of Investment Companies’ (AIC) UK All Companies and UK Equity Income sectors, an impressive 58 names have beaten the FTSE 100 over 12 months, most of which are actively managed.

Our table shows the top 10 active names by 12-month returns, but we also include five-year returns to show which have maintained the outperformance over a longer period.

Source: FE Analytics. Share price total returns given for investment trusts. Past performance is not a guide to future performance.

There are a few names that have done well on both time frames. Temple Bar Ord (LSE:TMPL), which regularly features in our bestseller lists, has returned almost 140% over five years, as has Artemis SmartGARP UK Equity I Acc GBP.

Ninety One UK Special Situations I Acc and Fidelity Special Values Ord (LSE:FSV) have also comfortably outperformed the FTSE 100 over five years, while City of London Ord (LSE:CTY) roughly matches it. The others are yet to beat the index over that time frame.

What are these funds doing right?

There are plenty of factors behind the FTSE 100’s resurgence, from low starting valuations to investors pivoting away from the US and the presence of some winning sectors and companies, from banks and miners to beneficiaries of higher defence spending such as BAE Systems (LSE:BA.) and Rolls-Royce Holdings (LSE:RR.).

If it’s tough to identify exactly what has driven a market’s returns, it can be even harder for funds.

But as the next table shows, the funds with strong 12-month returns have a few distinctive features. We also list their yields for those investors seeking income.

Source: ii analysis. Trust share price dividend yields from AIC on 13/01/26. Open-ended fund yields from latest factsheets, on a 12-month trailing basis.

To kick off with the top name, income fund Temple Bar is run with a value style and has around a quarter of its assets in financials.

The top holdings include NatWest Group (LSE:NWG), Aviva (LSE:AV.) and Barclays (LSE:BARC), but energy giants Shell (LSE:SHEL) and BP (LSE:BP.), chemicals business Johnson Matthey (LSE:JMAT) and the likes of BT Group (LSE:BT.A) and ITV (LSE:ITV) also sit in the list.

This large-cap focused fund introduced an enhanced dividend policy last year, which involves it using capital and revenue reserves to boost its payout.

That’s a contrast to names such as City of London, which remain resolutely focused on getting their income from company dividends.

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Ironically, Temple Bar makes liberal use of shares listed overseas. These account for almost 30% of the portfolio, with one overseas holding, NN Group NV (EURONEXT:NN), sitting in its top 10.

Other overseas shares in the portfolio have included TotalEnergies SE (EURONEXT:TTE), Stellantis NV (EURONEXT:STLAP) and Molson Coors Beverage Co Class A (NYSE:TAP.A).

The team has argued that investing overseas helps it to widen the net, while adding diversification.

To give one example, buying an energy company such as TotalEnergies prevents the team from having to have especially large positions in BP and Shell.

Of the names in the table Fidelity Special Values also makes good use of overseas shares, with City of London doing this to a lesser degree.

Style considerations

Value funds and those with an income approach have performed exceptionally well in recent years in part owing to their exposure to sectors such as financials and that’s reflected by the presence of Temple Bar, Fidelity Special Values, City of London and Ninety One UK Special Situations in the list.

Artemis SmartGARP UK Equity also has some focus on value - alongside other considerations.

The GARP initials stand for “growth at the right price” and by its own reckoning the firm’s proprietary SmartGARP software and investment process is “designed to find shares that are cheaper than the broader stock market but that are delivering faster profit growth”.

The fund has a huge allocation to financials, as shown in the table, a 69% allocation to large-cap shares, and some market stalwarts such as Barclays, GSK (LSE:GSK) and Lloyds Banking Group (LSE:LLOY) among its top 10 holdings, alongside other names such as Lion Finance Group (LSE:BGEO) (formerly known as Bank of Georgia) and Spanish energy company Repsol SA (XMAD:REP).

Source: Latest factsheets.

It’s also worth noting that, while FTSE 100 shares have done particularly well, some of these outperformers don’t limit themselves to blue-chip shares.

Fidelity Special Values has just 42.7% of its assets in the FTSE 100, with 34.5% in mid-cap shares.

Aberdeen Equity Income, which is looking to absorb Aberdeen stablemate Shires Income, also has a good slug of mid-cap exposure, as does the Artemis fund.

As such, there is some variety in the list. But it could be prudent to diversify your UK exposure, making sure to have some small and mid-cap exposure alongside an allocation to large caps, and holding growth and value funds alongside one another.

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Bizarrely, investors might find some inspiration looking at those UK funds that have had an especially bad run as a reminder of what’s currently out of favour, and which might compliment the likes of a value fund.

Quality growth investors have done especially poorly, as evidenced by the returns of names such as WS Lindsell Train UK Equity Acc and Liontrust Special Situations I Acc.

More generally some names with small, mid and micro-cap exposure have fallen on hard times but could help diversify your exposure.

To give one example, in December we made the case for holding IFSL Marlborough Special Sits A Acc, which has exposure to companies further down the market cap spectrum, alongside a high-flyer like Artemis UK Select I Acc.