The best-performing Elite Rated funds in 2024

2024 has been a busy year, with elections and geopolitical strife clouding the outlook. Nevertheless, the backdrop of falling inflation and interest rates has generally been good for financial markets, which have seen their second year of strong gains.

Best-performing funds 2024

For a second year in a row, the best-performing Elite Rated fund of the year has been T. Rowe Price US Large Cap Growth Equity, which has returned 37.3%*. A concentrated, high-conviction strategy, investing in large US firms that demonstrate innovation and change, it includes six of the ‘Magnificent Seven’: Microsoft, Apple, Amazon, Alphabet, Nvidia and Meta account for almost 46%** of this fund.

In second and third place are Baillie Gifford American and GQG Partners US Equity, further reflecting the dominance of technology stocks with the Baillie Gifford fund currently holding roughly a quarter of the portfolio in technology, including four Magnificent Seven names**.

What sector performed best in 2024?

In a surprise top of tables, Financials and Financials Innovation has emerged the best-performing sector of the year, returning 27.3% for investors***. Up from eighth place last year, the sector, as you would expect, is heavily influenced by economic activity. As long as a recession is avoided next year, then funds in this sector could continue to perform well as a stable or growing economy also boosts investor confidence, leading to increased investments in financial services, banking and insurance.

Followed closely by Technology & Technology Innovation, returning 26.8%, the top five sectors is rounded out by North America, India/Indian Subcontinent and North American Smaller Companies***.

Economic outlook in 2025

Investors could face a challenging landscape in 2025, marked by geopolitical risks, economic uncertainties, and polarised markets. The return of Donald Trump, with his focus on tariffs, tax cuts, and deregulation, adds to the complexity. Meanwhile, inflationary pressures, government debt, and uneven market performance further complicate investment decisions.

At our annual investment dinner, we talked to two of our Elite Rated managers to try and make sense of this environment, and to understand where the opportunities lie in the year ahead.

Ben Edwards, manager of BlackRock Corporate Bond, highlights the appeal of UK bond markets, citing favourable valuations and policy certainty. “In the UK, growth looks more like Europe than the US, and yields look more like the US than Europe,” he explains. He also notes that weakening consumer confidence and spending could support bond markets, with a catalyst being the disappearance of high cash rates.

Ben Leyland, manager of JOHCM Global Opportunities, emphasises the long-term shift toward “real world” companies like infrastructure, renewables, and industrials. He predicts Donald Trump will accelerate global efforts to build self-sufficiency and resilience. “We see real world companies taking advantage of the drive to self-sufficiency,” he states, highlighting sectors like semiconductors and life sciences as promising opportunities.

Watch our 2025 Investment Outlook series

*Source: FE Analytics, total returns in pounds sterling, discrete calendar year, 17 December 2024
**Source: fund factsheet, 31 October 2024
***Source: FE fundinfo, at 17 December 2024