Investing in investment funds has long been regarded as a prudent and accessible approach to building wealth over the long term. Whether you are a seasoned investor or just starting your investment journey, investment funds offer a range of benefits that can help you achieve your financial goals.
Investing in a fund is an excellent way to maximise and diversify your portfolio. In this article, we will provide a list of the best-performing funds listed on the UK equity market, as well as the best platforms you can use to invest.
Top Performing Funds at a Glance
Below, you can find the most popular funds for UK investors.
*Data as of 30 May 2023
| Fund Size | Ongoing charge | Net Asset Value | 5-year performance of trailing total returns observed daily | |
|---|---|---|---|---|
| Vanguard FTSE Global All Cap Index Fund GBP Inc | £2.29bn | 0.23% | £158.19 | +7.92% |
| SPDR® Bloomberg Euro High Yield Bond UCITS ETF | £383.38m | 0.40% | £43.36 | +0.53% |
| iShares Core FTSE 100 UCITS ETF GBP (Dist) | £11.47bn | 0.07% | £7.40 | +3.55% |
| HSBC FTSE All-World Index Fund C Income | £3.07bn | 0.13% | £2.05 | +8.36% |
| LV= Artemis Monthly Distribution (s2) Pn | £2.23m | 0.88% | £1.10 | +5.01% (3 years) |
| Vanguard LifeStrategy 100% Equity Fund A Acc | £5.38bn | 0.22% | £297.82 | +7.19% |
| Canlife Fundsmith Equity | £0.36m | 0.00% | £1.34 | +7.84% (3 years) |
| abrdn High Yield Bond Fund Standard Life Accumulation | £230.45m | 0.09% | £1.30 | +2.84% |
| OMR Schroder High Yield Opportunities SP | £2.41m | 1.07% | £3.65 | +1.77% |
| Premier Miton UK Money Market A income | £258.69m | 0.56% | £0.50 | +0.48% |
1. Vanguard FTSE Global All Cap Index Fund GBP Inc Overview
The Vanguard FTSE Global All Cap Index Fund GBP Inc is an inclusive investment fund with the goal of mirroring the performance of the FTSE Global All Cap Index.
It offers investors the chance to be exposed to a diverse array of global equities, enabling participation in the worldwide stock market. Denominated in GBP, the fund reinvests any generated income.
With sector allocations including 19.79% in technology, 15.08% in financial services, 12.23% in healthcare, 11.01% in industrial, and 10.72% in consumer cyclical, it provides a well-rounded portfolio across various sectors.
Managed by Vanguard Investments UK Limited, its top five holdings are:
Apple Inc
Microsoft Corp
Amazon Inc
Future on E-mini S&P 500 Futures
Alphabet Inc
2. SPDR® Bloomberg Euro High Yield Bond UCITS ETF Overview
This fund is an ETF, which means it can be traded on an exchange.
Its UCITS designation is very important, because it signifies that no single holding within this fund can hold more than 10% of its total net asset value. Through this structure, it provides a very high level of diversification, which is one of the drivers behind its performance in the last five years.
However, it also focuses on high-yield bonds (or junk bonds), which can generate very high yield, but is also very risky.
Managed by State Street Global Advisors Europe Limited, its top five holdings are:
Lorca Telecom Bondco S.A.U.
Telecom Italia S.p.A.
Nidda Healthcare Holding GmbH
Douglas GmbH
Techem Verwaltungsgesellschaft 675 mbh
3. iShares Core FTSE 100 UCITS ETF GBP (Dist) Overview
The designations of this exchange-traded fund indicate that it tracks the Financial Times Stock Exchange 100 Index, also called the FTSE 100 Index, or the 100 top companies on the London Stock Exchange.
The UCITS represents a very high level of diversification, since no single holding within this fund can hold more than 10% of the total value of the fund.
Three-quarters of its holdings are almost equally distributed among the consumer defensive, financial services, healthcare, energy, and industrial sectors.
Its top five holdings are:
AstraZeneca PLC
Shell PLC
HSBC Holdings PLC
Unilever PLC
BP PLC
4. HSBC FTSE All-World Index Fund C Income Overview
This index tries to match the performance of large and mid-cap stocks, focusing on both developed and emerging markets.
HSBC FTSE All-World Index Fund C Income is considered to be above average in terms of risk, due to its medium to high fluctuations. It offers broad exposure to global equity markets by investing in a diversified portfolio of companies across different countries and sectors. It aims to generate income, which is reinvested back into the fund.
Its holdings are mostly divided between the tech, finance, healthcare, consumer cyclical, and industrial sectors, but with a strong emphasis on tech.
Its top five holdings are:
Apple Inc
Microsoft Corp
E-mini S&P 500 Future June 23
Amazon Inc
Alphabet Inc
5. LV= Artemis Monthly Distribution (s2) Pn Overview
Split between 60% bonds and 40% equities, this fund has gained the capital and income growth potential of equities, while still containing some of the predictability, that is often associated with bonds.
This index has a strong focus on the financial services, industrial, energy, consumer defence, and healthcare sectors, with a bit more emphasis on financial services.
Its top five holdings are:
Abbvie Inc
Swiss Re AG
BAE Systems PLC
Rai Way SpA
Wells Fargo & Co
6. Vanguard LifeStrategy 100% Equity Fund A Acc Overview
This single fund is actually built out of ten different diversified funds, which means it includes over 7,000 companies.
Because of its focus on 100% equity, it gives a very high level of exposure. It also requires investors with a high level of risk tolerance since bonds are not in any way part of its structure.
Holdings are equally composed out of the tech, finance, healthcare, industrial, and consumer cyclical sectors.
Its top five holdings are:
Vanguard U.S. Equity Index Fund GBP Acc
Vanguard FTSE U.K. All Share Index Unit Trust GBP Acc
Vanguard FTSE Developed World ex-U.K. Equity Index Fund GBP Acc
Vanguard S&P 500 ETF USD Acc
Vanguard Emerging Markets Stock Index Fund GBP Acc
7. Canlife Fundsmith Equity Overview
Managed by the famous Terry Smith, the English Warren Buffet, the Canlife Fundsmith Equity is an investment fund that aims to achieve long-term capital growth by investing primarily in global equities.
The fund follows a concentrated approach, focusing on a select number of high-quality companies identified by Fundsmith LLP. It seeks to invest in businesses with sustainable competitive advantages and strong cash flow generation.
More than a third of its holdings are comprised of the consumer defensive sector, i.e., companies engaged in the manufacturing of food, beverages, household and personal products, packaging, or tobacco. A quarter of its holdings go to healthcare, with the rest being varied.
Its top five holdings are:
Microsoft Corp
Novo Nordisk A/S
Philip Morris International Inc
L'Oreal SA
IDEXX Laboratories Inc
8. abrdn High Yield Bond Fund Standard Life Accumulation Overview
Focusing on companies' high-yield bonds, this fund aims to generate income by investing in lower-rated fixed-income securities, which typically offer higher yields. However, as with any investment with high yields, these are pretty volatile.
Managed by Arthur Milson, its top five holdings are:
Aberdeen Standard Liquidity Fund (Lux) - Sterling Fund Z-1 Acc
Matterhorn Telecom S.A. 3.125%
Virgin Media Vendor Financing Notes III Designated Activity Company 4.875%
Rolls-Royce PLC 5.75%
Altice Luxembourg S.A. 8%
9. OMR Schroder High Yield Opportunities SP Overview
This fund aims to provide income and capital growth of between 4.5% and 6.5% per annum. The goal is to invest over a period of between three to five years, with investments focused on fixed and floating-rate securities, on a global level.
These assets are most often issued by governments and government agencies. And, as mentioned above, high yield means high risk. The fund’s past performance, though, has shown that it’s a very viable investment option.
Its top five holdings are:
Buy Protection on People's Republic of China SENIOR_UNSECURED/Pay: USD 1.00
Marcolin S.p.A. 6.125%
Talk Talk Telecom Group PLC 3.875%
Energy Transfer Lp Callable Bond Variable Usd 1000
Endeavour Mining PLC 5%
10. Premier Miton UK Money Market A income Overview
Described as a “fund for rainy days”, it’s a very safe and liquid investment and has strong potential to generate income. It has had steady performance for years, and is great if you want to keep it safe and simple.
The investments of this fund include fixed-rate bonds, variable-rate notes, commercial paper, deposits, cash, and near cash.
The fund invests in a diversified range of sterling-denominated deposits and short-term money market instruments issued by governments, financial institutions, and corporate entities.
The fund performance is influenced by interest rates set by the Bank of England, which may impact returns.
Its top five holdings are:
Close Brothers Group PLC 2.75%
Principality Building Society 2.375%
Banco Santander, S.A. 2.75%
First Abu Dhabi Bank P.J.S.C 1.375%
Southern Gas Networks PLC 4.875%
Funds Explained
In investment terms, a fund is a pooled investment vehicle. In other words, multiple investors combine to invest in a single pool, which is managed by a professional. The managers then use the invested funds to invest in a diversified portfolio of assets.
Every investor within a fund has their own share, which is proportional to their investment.
There are many different ways we can categorise funds, most often through the focus of their investment. The most common are:
Equity funds – A sub-type of mutual funds that primarily invest in stocks.
Bond funds – Also known as debt funds, its primary focus is bonds (government, municipal, corporate)
Index funds – As passive funds, index funds aim to replicate the performance of a specific market index, and tries to match the index’s returns.
Exchange-traded funds (ETFs) – Investment funds which are traded on the stock exchange. They try to match the performance of a specific index, asset class, or sector.
Sector funds – Funds focusing on a specific sector, like tech.
Pension funds – Typically sponsored by employers or governments to provide retirement benefits to employees, accumulating contributions over time and investing them in a diversified portfolio of assets.
Multi-asset funds - Funds that diversify across multiple asset classes, such as equities, bonds, and sometimes other assets like commodities or real estate
Risks and Benefits of Investment Funds
While the risks and benefits of investment funds do vary, based on the type of fund you are thinking of investing in, there are some general commonalities that can be made.
- Diversification – Funds usually invest in a diversified portfolio of assets, which helps spread risk across different securities, sectors, or geographic regions. This can then save the fund from the negative repercussions of a single investment's poor performance on the overall fund.
- Professional management – Investment funds are managed by professional fund managers who have expertise in analysing and selecting investments.
- Liquidity – Many investment funds can be bought or sold at the end of the trading day. This can let an investor convert their investments into cash whenever they choose.
- Accessibility – Funds offer a wide variety of investment opportunities. Coupled with the fact that they are run by professional managers means an investor can participate in the market, without necessarily having a vast amount of funds and technical expertise at their disposal.
- Market risk – All investment funds are subject to market risk. The value of the fund's investments can fluctuate due to various factors such as economic conditions, market volatility, and investor sentiment.
- Fees and expenses – Investment funds often come with management charges, administrative costs, and sales charges.
- Lack of control - While this can be considered a benefit for some investors, the fact is that their funds are completely under the control of a manager.
It depends greatly on the fund, and the minimum investment your broker or platform might require (if any). Another important factor is how much money you are willing to invest.
For example, a certain broker might not be interested in working with you if you are not willing to invest at least a thousand pounds. However, some platforms and brokers might be more than happy to do business with as little as £100.
Best Platforms for Investing in UK Funds
If you want to make the most out of your investments and your portfolio, you need to choose the right fund. However, you also need to choose the right platform. Here are three of the best options.
1. Hargreaves Lansdown – Best Overall
| Account minimum deposit | £1 |
|---|---|
| Account charges | 0.45% on the first £250,000 fund value 0.25% on the value between £250,000 - £1m0.1% on the value between £1m - £2m No charge on value over £2m |
| Share sale fee | £1.50 per deal |
| Investment types | Bonds, Funds, Trusts, Forex, Commodities, Stocks, Crypto (only through ETFs or stocks) |
Hargreaves Lansdown, a reputable investment platform in the UK, is recognized for its extensive range of investment options, including index funds. The platform offers a comprehensive suite of investment tools and services to cater to the diverse needs of investors, all while maintaining competitive rates and fees.
The company is authorised and regulated by the Financial Conduct Authority, prioritising data protection and security.
With a broad selection of investment options and access to market data, research reports, and investment analysis, Hargreaves Lansdown makes it convenient for investors to make informed decisions. The platform itself is user-friendly, providing a seamless experience on both the website and its mobile apps.
Hargreaves Lansdown's account charges are favourable, as they are based on the value of the portfolio. While the fees tend to be more beneficial for medium and high-value portfolios, even low-value accounts can benefit from competitive rates.
The iOS and Android apps provided by Hargreaves Lansdown have received positive reviews, with a rating of 4.7 and 4.1, respectively.
- You can get expert help on various issues including setting investment goals, planning your investments, and rebalancing your portfolio.
- There's a good selection of ready-made portfolios to choose from.
- The maintanence fees for ISA and SIPP accounts are capped at reasonable amounts.
- The trading and non-trading fees are quite high. The pricing for expert help can also be fairly steep for some investors.
- The platform is not very intuitive and can be quite hard to navigate.
- While the market research is far-reaching, analysis tools have some room for improvement.
2. Saxo Markets - Best for Traders With Higher Equity
| Account minimum deposit | £500 |
|---|---|
| Account charges | Annual custody fee0.12% (min. €120 or £ equivalent) |
| Inactivity fee | £25 after a quarter of inactivity |
| Fund investment fee (ETFs and investment trusts) | 0.10% (£8 min) |
| Share trading fee | 0.10% (£8 min) |
| Investment types | CFDs, Forex, Stocks & Shares, Derivatives, Options, Commodities, Cryptocurrency |
Saxo Bank Group, a leading fintech specialist, offers multi-asset trading and investment services through Saxo Markets. Established in 1992, Saxo Bank was an early adopter of online trading platforms and has operated in the UK since 2006.
The company is regulated by the UK Financial Conduct Authority, which means your money will be safe and sound.
The broker offers an impressive product catalogue encompassing forex, shares, commodities, indices, options, bonds, and futures. These can be traded through CFDs, forward contracts, or direct ownership.
It’s known for having an excellent user interface, as well as offering its clients high-quality industry research, especially for forex. However, some have complained about its lack of customer service.
Saxo Markets also has a complex tier function, where the higher the equity in your account gets, the lower your trading costs and the higher your benefits. For the UK specifically, you will need to have £200,000 in your account for a platinum account, and £1,000,000 for a VIP account.
Its SaxoTraderGo app has a 4.3 on Google Play, and a fantastic 4.7 on the App Store.
- It offers excellent customer service with various live channels, including a phoneline, email address, and livechat.
- The platform is very feature-rich and user-friendly.
- The product portfolio is very broad, including currencies, commodities, bonds, and futures.
- The minimum deposit requirement is fairly steep for industry standards.
- SaxoTraderPro lacks predefined layouts, and it takes time to customise the platform.
- You will need to pay subscription charges to use real-time pricing information.
| Name | Score | Visit | Disclaimer | |
|---|---|---|---|---|
 | 8.8 | Visithome.saxo | CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, FX or any of our other products work and whether you can afford to take the high risk of losing your money. Losses can exceed deposits on some products. |
3. Degiro - Best for Beginners
| Account minimum deposit | $0 |
|---|---|
| Account charges | £2.17 per stock exchange per year |
| Funds sale fee | Mutual funds – £3.5 + 0.2% annual admin feeEU mutual fund – £6.5 + 0.2% annual admin fee |
| Stock fees | £1.74 – US Stock£2.4 – UK Stock£3.5 – German Stock |
| Investment types | Stocks & Shares, Commodities, Derivatives, Penny Stocks |
First of all, we need to note that Degiro is supervised by the Netherlands Authority for the Financial Markets (AFM) and under prudential supervision of the De Nederlandsche Bank (DNB). However, its UK operations are regulated by the Financial Conduct Authority (FCA).
The platform has some of the lowest fees in the industry, no inactivity fees, and requires no minimum deposit. It's an excellent place for beginner investors to start and grow your portfolio.
Where Degiro is lacking is the number of options it offers. It doesn’t offer Forex trading, and its withdrawal options are pretty limited. And while the platform is very user-friendly, it doesn’t offer that much in terms of research tools.
Its Android app has a solid score of 4.2, and its iOS app has an excellent rating of 4.6.
- The platform is very user-friendly and comes with only a slight learning curve.
- There are diverse investment opportunities spanning numerous foreign markets.
- Non-trading charges are not steep.
- The platform occassionaly crashes during the signing up process, and it can take some time.
- The research and analysis tools are limited.
- The platform doesn't support ISA or SIPP accounts.
| Name | Score | Visit | Disclaimer | |
|---|---|---|---|---|
 | 8.4 | Visitdegiro.com |
