Which funds have performed best so far in 2024? | FundCalibre (2024)

• 80%* of Elite Rated funds and trusts have produced a positive return for investors
• IA Technology and Technology Innovation sector is the best performer in Q1
• US and Global dominate the best Elite Rated performers – with one fund returning 25%* in Q1
• Outlook: Bonds still look attractive despite interest cuts looming large

Our take on 2024, so far…

We have seen some positive stories in the first three months of 2024 – with strong performance from technology (artificial intelligence) and Japan’s ongoing recovery, both coming to mind. But, as with the end of 2023, the first quarter of this year has been dominated by changing interest rate expectations, with the big question being when will the first rate cut take place?

Rate cut expectations in developed markets have now moved from April/May to June/July 2024. Markets have been in a type of holding pattern for a number of months, eagerly awaiting more clarity on this – something we believe has started to happen in March.

Fixed income continues to look like a really attractive investment, as investors are currently getting higher yields in the knowledge that if we do see rate cuts, there will likely be capital appreciation in the bonds they hold. In short, they appear to be in a sweet spot.

The likes of infrastructure and REITs, which will both benefit from rates falling, are also an obvious safe play. That said, on the other side, the US remains extremely strong with GDP growth and the continued rise of two of the Magnificent Seven, which are the most heavily exposed to the AI theme. You can’t rule out these stocks going higher, but investors must be aware that these shares are expensive to buy at this stage.

Those looking at bargains from a geographical perspective may want to cast an eye on both the UK and China, with valuations looking very attractive on long-term measures, although the journey – particularly in China – is unlikely to be a smooth one.

Best-performing sectors so far in 2024

So far, trends from 2023 continue to dominate, with the IA Technology and Technology Innovation sector continuing to be the best performer, with the average fund returning 11.3%* for investors. It’s followed by IA North America (9.7%*) and IA Japan, which is up 9.3%*. IA Financials and Financial Innovation and IA Global make up the rest of the top five, with average returns of 8.3% and 7.2% respectively*.

In contrast, the worst-performing sector was IA Latin America, with its fund constituents posting an average loss of 3.8%*, followed by IA Property Other (down 3.1%*) and IA Infrastructure (down 2.7%*). Despite recent underperformance, property may be turning a corner, according to our Elite Rated managers. Find out more here.

IA UK Index Linked Gilts and IA EUR Government Bond made up the remaining two places in the bottom five sectors, posting losses of 2.4% and 2%* respectively.

Best-performing Elite Rated funds so far in 2024

When it comes to individual funds, the best-performing Elite Rated fund so far in 2024 has beenGQG Partners US Equity, returning 25.7%* for investors. An unconstrained, concentrated portfolio of only 27 holdings**, its success has been largely driven by investing in the technology theme which is the fund’s largest overweight at 51.1% of the portfolio**. Top holdings include Meta, Nvidia, Eli Lilly and Microsoft**.

It is followed in second and third place byWS Blue Whale Growth and Artemis US Extended Alpha, with returns of 18.9% and 17.2%* respectively. Both funds hold over a quarter of their portfolio in technology, including both Meta and Nvidia**.

*Source: FE Analytics, total returns in sterling, calendar year 2024

**Source: fund factsheet, 29 February 2024