Halfway into 2024, it is time to take stock of how funds have performed. Artificial intelligence has been one of the big success stories for markets and we’ve seen the first rate cut, which came from the European Central Bank. So: which funds have managed to grow, and which funds have fallen?
Overall, almost 90% of the 3,112 funds in our dataset (Morningstar rated and available for sale in the UK) are up this year. The best-performing fund was up 30.45% and a total of 545 funds have grown in the double digits so far this year. The worst performer was down 20.40%, but only 20 funds in total had double-digit losses over the half-year period.
Category wise, India equity has had the strongest six-month period. The average return for the 23 funds in the category is 16.23% – but this is closely followed by US large cap blend and growth equity categories. The largest fund category, GBP allocation 60-80% equity (with 248 funds available to UK investors) is up 5.86% on average.
Only four categories have average returns below 5% and the worst, albeit small categories, are Brazil and Latin American equities. These funds were also the worst performers individually – and more on that below.
Technology and Large-Caps are Winning in 2024
The best 10 funds have all benefited from the AI trend, the main driver behind the strong S&P 500 returns. We need to look to 18th place to find anything not focused on US or global large-cap growth or thematic technology – and in this case, that’s India equity, which is no surprise looking at the category chart above.
These were the three best-performing funds in H1.
Neuberger Berman 5G Connectivity Fund
• Morningstar Medalist Rating: Bronze
• Morningstar Category: Equity Technology
• Fund Size: £928 million
In the second quarter, the actively managed Neuberger Berman 5G Connectivity Fund rose 9.02%, while the average equity technology fund gained 3.28%. The £928 million fund has climbed 30.45% year to date, outperforming the average fund in its category, which rose 12.42%.
Janus Henderson Global Technology Leaders Fund
• Morningstar Medalist Rating: Neutral
• Morningstar Category: Equity Technology
• Fund Size: £1.5 billion
The £1.5 billion Janus Henderson Global Technology Leaders Fund rose 9.20% in the second quarter. The gain on the actively-managed fund beat the 3.28% gain on the average fund in the equity technology category. Year to date, the Janus Henderson fund is up 29.96%, while the average fund in its category is up 12.42%.
Legal & General Global Technology Index Trust
• Morningstar Medalist Rating: Gold
• Morningstar Category: Equity Technology
• Fund Size: £3.5 billion
The passively-managed Legal & General Global Technology Index Trust is up 13.97% in the second quarter, outperforming the average fund in the equity technology category, which rose 3.28%. The £3.5 billion fund has gained 29.51% year to date, while the average fund in its category is up 12.42%.
Latin America and Small-Caps Fall Behind
There aren’t many funds in the red for the past six months – the only major equity indices that fell were the CAC 40 in France, the SSE Composite in China and the Bovespa in Brazil, Dan Coatsworth, investment analyst at AJ Bell, says.
Brazil, which is strongly tied to the commodity cycle, has often featured at the bottom of the monthly roundups, and occasionally at the top, showing the volatile nature of the market. Watch our recent interview with Artemis EM manager Raheel Altaf to find out what’s currently driving the Brazil market.
These were the worst three performers in H1.
HSBC Global Investment Funds – Brazil Equity
• Morningstar Medalist Rating: Negative
• Morningstar Category: Brazil Equity
• Fund Size: £95.9 million
In the second quarter, the actively managed HSBC Global Investment Funds – Brazil Equity fell 14.19%, while the average Brazil equity fund lost 13.09%. The £95.9 million fund has dropped 20.40% year to date, falling further than the average fund in its category, which fell 18.13%.
BlackRock Global Funds – Latin American Fund
• Morningstar Medalist Rating: Neutral
• Morningstar Category: Latin America Equity
• Fund Size: £495.2 million
The £495.2 million BlackRock Global Funds – Latin American Fund fell 15.06% in the second quarter. The loss on the actively managed fund was worse than the 13.60% loss on the average fund in the Latin America equity category. Year to date, the BlackRock fund is down 19.52%, while the average fund in its category is down 15.41%.
Barings Emerging Markets Umbrella Fund – Barings Latin America Fund
• Morningstar Medalist Rating: Gold
• Morningstar Category: Latin America Equity
• Fund Size: £153.4 million
In the second quarter, the actively managed Barings Emerging Markets Umbrella Fund – Barings Latin America Fund fell 13.48%, while the average Latin America equity fund lost 13.60%. The £153.4 million fund has dropped 16.45% year to date, falling further than the average fund in its category, which fell 15.41%.
June Followed 2024 Trends
Three quarters of all funds in the dataset had a positive June. We find both technology and India among the best performers although neither secured the top spot. At the bottom, we find climate change and energy transition focused funds. These are the best and worst five funds for the past month.
The Best Performer: FSSA Asia All-Cap Fund
• Morningstar Medalist Rating: Gold
• Morningstar Category: Asia-Pacific ex-Japan Equity
• Fund Size: £7.1 million
In the second quarter, the actively managed FSSA Asia All-Cap Fund rose 12.21%, while the average Asia-pacific ex-Japan equity fund gained 5.20%. The £7.1 million fund has climbed 13.32% year to date, outperforming the average fund in its category, which rose 8.19%.
The Worst Performer: GMO Climate Change Investment Fund
• Morningstar Medalist Rating: Gold
• Morningstar Category: Equity Ecology
• Fund Size: £535.7 million
The £535.7 million GMO Climate Change Investment Fund fell 9.01% in the second quarter. The loss on the actively managed fund was worse than the 0.40% loss on the average fund in the equity ecology category. Year to date, the GMO fund is down 13.93%, while the average fund in its category is up 4.04%.
This article was generated with the help of automation and reviewed by Morningstar editors
