AJ Bell website
Only a third, 33%, of active funds have outperformed passive alternatives over 10 years and just 31% of active funds outperformed passive funds in 2024.
Active managers are struggling, especially in Global and North America sectors, while just 17% of active Global funds have outperformed a passive alternative, according to analysis from A J Bell.
Laith Khalaf, head of investment analysis at AJ Bell, said: “The long-term performance of tracker funds in the key US and Global sectors has been nothing short of astonishing.
“The idea that a plain vanilla US tracker fund could quadruple your money in a decade would have been beyond the wildest dreams of all but the most overconfident investors. Yet that is precisely what has unfolded in the last 10 years.”
As a result retail investors have withdrawn more than £100bn from active funds in the last three years, the firm said in its latest 'Manager versus Machine' report.
In the UK, investors enjoyed a 10.5% return from the typical tracker fund in 2024, but only 35% of active funds posted a better performance.
There are some active funds and their managers/strategies currently bucking that trend, according to Paul Angell, head of investment research at AJ Bell.
He highlighted three active funds that have added more than £1bn in assets under management (AUM) in the 12 months to the end of February 2025. He said: “Unsurprisingly, each fund has delivered strong relative returns in recent years and they are all managed by highly credible portfolio managers.”
The three funds he picked are:
- JPM Global Focus Growth - “This Lux SICAV has added over £2bn over the year, with the strategy’s popularity leading to JPM launching a UK OEIC of the same name in May 2024.”
- Artemis UK Select - “This fund has been the envy of the UK All Companies sector over the year, taking in around £1.2bn.”
- Man Dynamic Income - “This June 2022-launched strategic bond fund has also added over £1 billion over the year, which is particularly impressive given the modest starting point of just £230 million 12 months ago.”
• AJ Bell’s Manager versus Machine report looked at active funds in seven key equity sectors and compares performance to the average passive alternative.
