Seven standout funds beating rallying markets

Investors are not short of reasons to avoid active funds, be it the stunning gains made by trackers or the struggles of even the best-known stock pickers. But a select few have managed not only to outpace the market but to do so with a good degree of consistency.

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Currency effects have dealt a slight blow to the S&P 500’s sterling total returns this year but other mainstream equity regions are sitting on some substantial gains.

As the table shows, widely followed indices in the emerging markets and Europe have made sterling total returns of more than 20% so far in 2025, with shares in the UK and Japan also notably up.

If this seems like a free lunch for tracker funds, it’s worth noting that some active portfolios have also been pulling their weight. Almost 50 actively managed emerging market funds and investment trusts have beaten the index over this period, while nearly 20 have done so in Europe. Roughly 25 UK funds have outpaced the FTSE All-Share.

The big question is whether outperformers can stay ahead of the market with any consistency. But a closer look at the numbers shows that some of this year’s best performers have been on good form over the last few years, potentially warranting a place in a portfolio.

Seven standout funds

In the hunt for consistent outperformers we looked at five of the top active funds in five regions (UK, Europe, Asia, Japan and Emerging Markets), as judged by their performance in 2025 so far. We then checked how many times in each of the last five calendar years (including 2025) each fund had beaten the index.

Consistency on this front is no small ask. From our sample of 25 funds across those five regions, just three names had beaten the index in all five calendar years, although six additional funds outperformed in four of those years.

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It’s worth adding that outperformance in one given year doesn’t always mean a rich return.

In some years the market has tanked, and the fund has managed to outperform simply by losing less money than the index. While not an ideal outcome, this can still have a big positive impact on relative returns.

The UK and Europe

Starting at home, two UK equity funds from the same company have done a good job versus the FTSE All-Share in recent years. Artemis UK Select I Acc and Artemis SmartGARP UK Eq I Acc GBP have each beaten the market in four of the five selected years.

We recently noted that Artemis UK Select had continued to deliver the goods despite massively increasing in size, although it has a greater focus on the likes of large caps than it used to.

The fund can invest across the market cap spectrum but had 78.6% of its assets in large caps at the end of August, with 17.7% in mid-caps and just 1.2% in smaller companies.

With the FTSE 100 performing well lately, the fund has managed to find some blue-chip winners. It has a 41% allocation to financials and top holding Standard Chartered (LSE:STAN) has made big gains this year, as have Barclays (LSE:BARC), NatWest Group (LSE:NWG), HSBC Holdings (LSE:HSBA) and St James's Place (LSE:STJ), all of which sit in its top 10 holdings list.

Other top positions include investor favourite Rolls-Royce Holdings (LSE:RR.), and Marks & Spencer Group (LSE:MKS).

The standout funds vs markets

Source: FE Analytics, to 22/10/2025. Past performance is not a guide to future performance.

Elsewhere at Artemis, the firm’s SmartGarp franchise has performed exceptionally well in recent history, with its UK and Europe funds cropping up in this analysis.

SmartGarp is a proprietary screening tool that seeks to find those companies that are growing faster than the market but trading on lower valuations.

This means the SmartGarp funds tend to hold stocks that have “lower valuations than the market average, upgrades to profit forecasts and are under-owned by the investment community, while at the same time benefiting from helpful trends in the wider economy”.

Artemis SmartGarp UK Equity again has a big allocation to financials, accounting for 44.9% of the fund at the end of August.

Several banks sit in its top 10 list, although we see various names from other sectors, from GSK (LSE:GSK) to International Consolidated Airlines Group SA (LSE:IAG) and Imperial Brands (LSE:IMB).

Artemis SmartGARP European Equity I Acc GBP lists Societe Generale SA (EURONEXT:GLE), Novartis AG Registered Shares (SIX:NOVN) and NN Group NV (EURONEXT:NN) among its top positions. There is, once again, a big weighting to financials, while on a geographic basis the fund has decent exposure to Italy, France, Germany and Spain.

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The use of the screening tool means the investment team can end up making big portfolio changes based on what the data tells them. Manager Philip Wolstencroft noted in an update earlier this year, for example, that the Europe fund had not held Societe Generale until mid-February this year.

“It is now our largest position and has been one of the biggest contributors to performance year-to-date,” he said. “When the data changes, we change our portfolios and are not afraid to do so dramatically.”

JPMorgan European Growth & Income Ord (LSE:JEGI) has also beaten the index in each of the five calendar years, based on its share price total return.

The team behind this trust looks for companies with an attractive price tag, strong balance sheets and “good business momentum”, and looks to combine characteristics from different investment styles (value, quality and momentum).

The trust is fairly well diversified, with its biggest position in ASML Holding NV (EURONEXT:ASML) making up just 3.9% of the portfolio. It holds other well-known European stocks among its top 10, from the recently volatile German software company SAP SE (XETRA:SAP) to Siemens AG (XETRA:SIE) and Nestle SA (SIX:NESN). Like many of its JPMorgan stablemates it pays out a set proportion of its NAV as a dividend.

Two other European equity funds, JPM Europe Dynamic (ex-UK) C Net Acc  and Janus Henderson European Focus I Acc, outperformed in four years. But with two funds already having beaten the market in five years, we leave them out of this analysis.

Further afield

The emerging markets and Asia are having a moment in the sun, partly because of the blistering rally staged by Chinese equities this year. And while no emerging market portfolio has beaten the market in more than three of our five selected years, there’s more hope in the Asia sectors.

M&G Asian GBP I Acc has beaten the broader market in each of the five years, although it’s tricky to discern the drivers of its success.

Literature for the fund notes that it’s agnostic when it comes to investment style, although the managers look to “identify exploitable gaps between price and value in securities”.

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Nearly a third of the fund is in China, with a relatively low 10.2% allocation to India. The fund lists Chinese internet giants Tencent Holdings Ltd (SEHK:700) and Alibaba Group Holding Ltd Ordinary Shares (SEHK:9988) among its top 10 holdings, while the market’s biggest constituent Taiwan Semiconductor Manufacturing Co Ltd ADR (NYSE:TSM) is its largest position on a 9.9% weighting.

Meanwhile, Federated Hermes Asia exJapan Eq F GBP Acc and Fidelity Emerging Asia W-Acc-GBP each outperformed in four of the five years.

No Japanese equity fund from our selection managed at least four calendar years of outperformance in our time frame.