Investment funds are a popular choice for investors who want to build a diversified portfolio. These funds allow you to invest in a wide range of underlying shares, often with low costs.
Here, I take a look at the five best investment funds that would have made you some serious returns over the last three years. Which funds are performing well? And is it worth adding them to your portfolio this month?
5 best investment funds in January 2022
Here are the five top-performing funds over the last three years. The figures are based on the total return, which includes dividend income as well as capital growth.
1. Baillie Gifford American B Acc
This Baillie Gifford fund is often an expert top pick. It has had a total return of 173.7% over the past three years. The fund’s aim is to outperform the US S&P 500 Index by at least 1.5% each year. IT or tech stocks make up 36.5% of the underlying fund, and Shopify is the biggest holding at 9% of the total fund.
2. L&G Global Technology Index F Acc
This technology fund has had a total return of 167.1% over the past three years. The fund’s aim is to provide growth by tracking IT companies within the FTSE World Index. The fund is heavily weighted towards North American and tech stocks.
3. Baillie Gifford L/T Glb Gr Invm B Acc
This long-term growth fund is another of Baillie Gifford’s successful investment funds. The fund has had a total return of 164.0% over the past three years. The fund’s aim is to outperform the FTSE All World Index by at least 2.5% per year. The fund is mainly invested in North American stocks, though 21.5% of the fund is currently invested in emerging markets.
4. Baillie Gifford Positive Change B Acc
This popular ethical fund has had a total return of 151.2% over the past three years. The fund aims to invest “at least 90% in shares of companies anywhere in the world whose products or behaviour make a positive impact on society and/or the environment”.
It is heavily weighted toward US stocks, though 21.5% is currently invested in emerging markets. The fund also has a focus on health care stocks with 33% invested in this sector.
5. Sanlam Artificial Intelligence Z GBP
This niche fund has had a total return of 147.4% over the past three years. The fund’s aim is to achieve capital growth by investing in companies associated with artificial intelligence.
What do the top 5 investment funds have in common?
Most of the top five investment funds have invested heavily in tech stocks, which have seen amazing share price growth over the last three years. For example, Tesla stocks have seen their share price increase 13,198% since 2012.
Should you invest in the top 5 investment funds?
Remember that past performance is not a guarantee of future growth. In fact, it could be just the opposite. A top-performing fund or sector may be reaching its peak and due a fall in value.
That’s why many experts recommend a balanced approach to investing. It’s important to spread your investment risk across many types of shares and geographical locations.
If you want to invest in a low-cost fund but are not sure where to start, then check out our top trading platforms for beginners.
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About the author
Alice is a Suffolk-based personal finance writer specialising in pensions, tax, investment and small businesses. She is a qualified Chartered Accountant and has previously worked for KPMG London and Tesco Plc.
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