-
This report analysed the performance of 282 UK equity funds across the IA UK All Companies and IA UK Equity Income sectors over 6-month, 1-year, 3-year, and 5-year periods.
-
Only 58 funds earned a top 4 or 5-star rating for delivering consistently strong returns across the periods analysed.
-
166 funds received a poor 1 or 2-star rating for consistent under performance during the same periods.
-
The IA UK All Companies sector returned an average of 6.24% so far in 2025, while the IA UK Equity Income sector averaged 6.24%. In comparison, North American equity funds delivered an average loss of -5.99% over the same period.
UK equity funds have made a strong comeback in 2025, with several delivering impressive returns that outperform most others in the market. While many investors have continued to pull money out of UK-focused funds, this year’s performance shows that the UK market still offers real opportunities - especially for those who choose their funds carefully.
In this report, we review 282 UK equity funds across the IA UK All Companies and IA UK Equity Income sectors. We analysed each fund over 6-month, 1-year, 3-year, and 5-year periods and feature 10 funds that have consistently outperformed their sector peers.
UK Equity Fund Performance Summary
For this report, we analysed the performance and sector ranking of 282 UK equity funds across the IA UK All Companies and IA UK Equity Income sectors. Each fund was reviewed over the past 6-month, 1-year, 3-year, and 5-year periods, and assigned an overall performance rating based on how consistently it outperformed its sector peers.
Our findings show that just 58 of the 282 funds achieved a top-performing 4 or 5-star rating, with only 35 earning the highest 5-star score. These funds demonstrated strong and consistent performance across multiple timeframes, standing out for their ability to deliver above-average returns within their respective sectors.
In contrast, a large proportion of funds underperformed. A total of 85 funds were rated 1 star, and a further 81 received 2 stars - indicating persistent underperformance relative to sector averages. This means that 59% of the funds analysed consistently delivered below-average returns.
10 Top Performing UK Equity Funds
The 10 funds listed below have consistently ranked among the top UK equity funds over several different time frames within the IA UK All Companies and IA UK Equity Income sectors. Their results over the most recent 6-month, 1-year, 3-year, and 5-year periods demonstrate a proven ability to deliver competitive returns in different market environments.
Each of these funds achieved a top 4 or 5-star rating, reflecting their consistent outperformance relative to sector peers.
1. abrdn UK Equity Enhanced Index Fund
The abrdn UK Equity Enhanced Index fund is part of the IA UK All Companies sector and has steadily built a strong track record for outperforming its peers.
Its strategy is built around an ‘enhanced index’ approach, which means rather than simply replicating the FTSE All-Share Index, the fund applies a rules-based overlay to tilt towards companies with stronger financials, positive momentum, and more attractive valuations. This allows it to aim for slightly better returns than a conventional tracker fund, while still keeping charges low, with an ongoing fee of just 0.14%.
This disciplined and efficient strategy has helped deliver strong and consistent results. Over the past 6 months, the fund returned 8.07%, ranking 20th out of 212 funds in its sector and comfortably beating the sector average of 4.15%. Over 1 year, its return of 10.94% ranked 28th of 209, and across 3 years it delivered a cumulative return of 29.25%, placing it in the top quartile of its peer group. Over 5 years, it returned 70.07%, outperforming the sector average of 52.05% and ranking 34th of 197 funds.
2. Artemis SmartGARP UK Equity Fund
The Artemis SmartGARP UK Equity fund sits within the IA UK All Companies sector and has delivered standout performance across multiple timeframes. It follows a distinctive investment approach known as “SmartGARP” – a quantitative stock-picking model that combines value and growth characteristics. The process filters the market to identify UK-listed companies that are attractively valued but also demonstrating improving fundamentals, such as earnings momentum or upgrades in analyst expectations. This model is designed to remove emotion from decision-making and instead apply a repeatable, data-driven framework that aims to uncover undervalued opportunities with improving outlooks.
This disciplined approach has translated into very competitive results. Over the past 6 months, the fund delivered growth of 16.59%, making it the best performer in its sector out of 212 funds. Its 1-year return of 26.08% also ranks it first among 209 peers, while over 3 years it returned 51.2%, placing it 3rd of 206. These strong short- and medium-term returns are underpinned by its 5-year performance, which stands at a remarkable 143.4%, ranking the fund first out of 197 in the sector and nearly tripling the average return of 52.05%.
3. Artemis UK Special Situations Fund
The Artemis UK Special Situations fund targets opportunities across the UK equity market with a focus on unloved or overlooked companies that have the potential for recovery or transformation. Managed with a contrarian mindset, the fund looks for businesses trading below their intrinsic value due to temporary challenges, or structural change. This ‘special situations’ approach often means the portfolio is tilted towards mid and small-cap stocks where valuation anomalies are more common, allowing for greater potential upside when sentiment improves.
The strategy has been successful in identifying long-term winners. Over the past 6 months, the fund achieved growth of 11.2%, ranking 4th out of 212 funds in its sector and well ahead of the 4.15% sector average. Its 1-year return of 13.35% ranked it 13th of 209, while over 3 years it returned 37.22%, placing it firmly in the top decile of its peer group. Its 5-year return stands at 86.91%, outperforming the sector average of 52.05% and ranking it 15th of 197 funds.
With assets under management exceeding £1.1 billion, this fund has attracted strong investor interest thanks to its differentiated strategy and consistent delivery. It can be particularly appealing for investors willing to take a more active stance in pursuit of undervalued opportunities, and who recognise the long-term benefits of backing recovery stories before they return to favour.
4. Dimensional UK Value Fund
The Dimensional UK Value fund takes a factor-based approach to investing, with a clear emphasis on value stocks.
Rather than relying on individual stock selection or active forecasting, the fund systematically targets segments of the UK market that research has shown to offer higher expected returns over time, namely companies with lower valuations, smaller market capitalisations, and higher profitability.
Over recent years, this structured approach has produced impressive results. The fund returned 8.78% over the past 6 months, ranking 17th out of 212 in its sector. Its 1-year return of 12.99% places it 14th among 209 peers, while over 3 years it delivered a cumulative return of 33.95%, again ranking 14th out of 206. Over 5 years, its performance is even more striking, with a return of 110.66% - more than double the sector average of 52.05%.
With more than £700 million under management in this fund alone, Dimensional’s UK Value strategy has gained strong traction among investors who prefer a systematic, low-turnover approach that avoids the pitfalls of market timing.
5. Fidelity Special Situations Fund
The Fidelity Special Situations fund has long been one of the most recognised names in UK equity investing, with a strategy that combines deep fundamental research and a strong value discipline. The fund seeks out UK companies that are undergoing change - be it operational improvement or restructuring - and aims to invest before the wider market reappraises their potential. While it maintains the flexibility to invest across the market-cap spectrum, it has historically favoured mid and small-cap stocks where inefficiencies are more likely to occur and recovery potential is higher.
This style has delivered consistently strong results. Over the past 6 months, the fund returned 9.67%, ranking 8th out of 212 funds in the IA UK All Companies sector. Its 1-year performance was even more impressive, with a return of 14.85% placing it 6th out of 209 peers. Over 3 years, it delivered 35.35%, and over 5 years it returned 101.89%, ranking 8th out of 197 funds and almost doubling the sector average of 52.05%.
With assets under management exceeding £3.3 billion, this fund remains a core UK equity holding for investors seeking strong, active management with a clear focus on long-term value creation. Its ability to navigate shifting market conditions and capitalise on turnaround stories continues to underpin its position as one of the UK’s most enduring and respected investment strategies.
6. Invesco UK Enhanced Index Fund
The Invesco UK Enhanced Index (UK) Z Acc fund offers investors a rules-based alternative to traditional active management by aiming to outperform the FTSE All-Share Index through an ‘enhanced index’ strategy. Rather than simply tracking the index, the fund applies a systematic overlay to modestly adjust the weightings of its holdings based on fundamental and technical factors. The result is a low-cost portfolio that aims to deliver incremental outperformance without the volatility often associated with fully active approaches.
This strategy has produced consistent results across a range of market environments. Over the past 6 months, the fund delivered a return of 7.91%, ranking 22nd out of 212 in the IA UK All Companies sector. Its 1-year performance of 10.08% placed it in the top fifth of its peer group, while its 3-year return of 32.3% ranked 16th out of 206. Over 5 years, the fund returned 77.28%, outperforming the sector average of 52.05% and securing a top-quartile position at 20th out of 197 funds.
7. JOHCM UK Dynamic Fund
The JOHCM UK Dynamic A Acc fund takes a flexible, high-conviction approach to investing in UK companies, with a focus on identifying attractively valued businesses across the market-cap spectrum. The fund’s strategy is centred around valuation discipline and capital preservation, aiming to participate in market upside while managing downside risk. The portfolio is actively managed with a relatively concentrated number of holdings, which allows the managers to focus on their strongest ideas and avoid over-diversification. Importantly, the fund also employs a dynamic allocation style, adjusting sector and stock exposures based on evolving market conditions and valuation opportunities.
This pragmatic and valuation-led approach has underpinned strong long-term performance. Over the past 6 months, the fund returned 9.26%, ranking 13th out of 212 funds in the IA UK All Companies sector. Over 1 year it achieved 10.39%, and across 3 years it delivered a notable 37.75%, placing it 6th of 206 funds. Its 5-year return stands at 99.75%, almost doubling the sector average of 52.05% and ranking 9th out of 197 peers.
Managing more than £730 million in assets, the fund has built a strong reputation among investors who seek a value-aware UK equity strategy with the flexibility to adapt to changing conditions.
8. Ninety One UK Special Situations Fund
The Ninety One UK Special Situations I Acc GBP fund is a high-conviction UK equity strategy that focuses on companies with undervalued share prices and clear catalysts for long-term recovery or growth. It adopts a patient, bottom-up investment approach, targeting firms that are temporarily out of favour but where strong underlying fundamentals and strategic change can unlock significant upside over time. The portfolio is relatively concentrated, allowing the managers to build meaningful positions in their highest conviction ideas, often across small and mid-cap names where price inefficiencies tend to be more pronounced.
This strategy has delivered standout performance across all measured periods. Over the past 6 months, the fund achieved growth of 14.82%, ranking 2nd out of 212 in its sector. Its 1-year return of 18.13% placed it 3rd among 209 funds, and over 3 years it delivered an exceptional 67.92% return - the highest of all 206 peers in its category. Over 5 years, the fund returned 133.29%, ranking 3rd out of 197 and more than doubling the sector average of 52.05%.
9. BNY Mellon UK Income Fund
The BNY Mellon UK Income Inst W Acc fund sits within the IA UK Equity Income sector and is managed with a clear focus on delivering both capital growth and a sustainable income stream. The fund targets high-quality UK companies with strong balance sheets and dependable cash flows - often those with the capacity to grow and maintain dividends across market cycles. While income remains a priority, the fund does not chase yield at the expense of total return. Instead, it strikes a careful balance between income generation and long-term capital appreciation, making it suitable for investors seeking a dependable core UK equity holding.
This measured and disciplined approach has led to consistently strong results. Over the past 6 months, the fund returned 12.5%, making it the top performer out of 69 funds in its sector - more than doubling the sector average of 5.76%. Over 1 year, it delivered a return of 11.54%, ranking 16th out of 68. Its 3-year return of 37.9% places it 6th in its sector, and over 5 years, the fund returned 90.55%, well ahead of the 65.64% sector average and ranking 10th out of 66 peers.
10. TM Redwheel UK Equity Income Fund
The TM Redwheel UK Equity Income fund has established itself as one of the most consistent and top-performing strategies in the UK Equity Income sector. Its approach centres on investing in undervalued UK-listed companies that not only pay attractive dividends but also offer meaningful scope for capital growth. The fund places strong emphasis on fundamental company research, focusing on businesses with stable cash flows, strong balance sheets, and the potential to grow both earnings and dividends over time. Unlike many traditional income funds that are heavily tilted towards defensive sectors, Redwheel's strategy often includes more cyclical or underappreciated areas of the market - giving it greater potential to outperform during economic recoveries or market re-ratings.
This combination of income discipline and valuation awareness has driven exceptional long-term performance. Over the past 6 months, the fund returned 9.99%, ranking 6th out of 69 funds in the sector. Its 1-year return of 16.25% placed it 6th of 68, while over 3 years it delivered a standout 40.08%, the highest return of all 68 sector peers. Its 5-year performance is equally impressive, returning 122.87% - nearly doubling the sector average of 65.64% and earning it the top spot among 66 funds.
With assets under management of approximately £1 billion, the fund has built a strong following among investors seeking an income strategy that is not only resilient but also opportunistic.
Worst Performing UK Equity Funds
Not all UK equity funds have delivered consistent or competitive results. In fact, a significant number have struggled to keep pace with their sector averages. As highlighted in our analysis, 166 funds received a low 1 or 2-star rating, reflecting ongoing underperformance across multiple timeframes.
From this group, we have identified 10 of the poorest-performing UK equity funds based on their returns over the past 6 months, 1 year, 3 years, and 5 years. Each of these funds has been rated 1 star, having consistently failed to deliver returns in line with their peers. Their inclusion in this list underlines the importance of reviewing fund holdings regularly and avoiding strategies that have repeatedly underperformed across market cycles.
UK Equity Funds Outperform U.S. Equities in 2025 Despite Continued Outflows
UK equities remain a key part of many investment portfolios, but investor appetite for the sector has declined in recent years as attention shifted towards regions that delivered stronger short-term gains, particularly North America and high-growth technology stocks. Over the past 12 months, the combined assets under management across the IA UK All Companies and IA UK Equity Income sectors have fallen from £179.4 billion to £167.5 billion, a reduction of 7.4%. This decline highlights continued investor caution towards the domestic market, despite signs of improving performance.
So far in 2025, UK equity funds have shown encouraging results. The IA UK All Companies sector returned an average of 4.15%, while the IA UK Equity Income sector performed even more strongly, averaging 7.72% over the same period. In contrast, North American equity funds recorded an average loss of 8.29%.
These figures reinforce the importance of maintaining a balanced and diversified investment strategy. While certain regions may lead over specific timeframes, no single area delivers consistent growth. The recent strength of UK equity funds, despite falling investor flows, underlines the value of reviewing portfolio exposure and ensuring it reflects long-term opportunities rather than short-term trends.
Reviewing Fund Quality and Portfolio Efficiency
The performance of UK equity funds in 2025 highlights an important truth for investors: strong opportunities remain in the UK market, but not all funds deliver the same results. While overall investor sentiment towards UK equities has remained cautious, many of the funds featured in this report have shown that with the right strategy and discipline, it is possible to consistently outperform sector peers.
At the same time, our analysis found that the majority of UK equity funds continue to underperform. More than half of the funds reviewed delivered below-average returns over multiple timeframes, reinforcing the need for regular portfolio reviews. Holding underperforming funds can limit growth and reduce the overall efficiency of an investment portfolio.
With significant differences in fund quality, it’s essential for investors to ensure that their portfolios are built around funds that not only align with their objectives, but also demonstrate a track record of consistent performance. As markets continue to shift, the ability to identify and hold the strongest funds will remain a key factor in achieving better long-term outcomes.
The Importance of Professional Portfolio Oversight
While performance data highlights the clear difference between strong and weak funds, making the right investment decisions goes beyond simply reviewing past returns. Understanding how each fund fits within a wider portfolio, how they interact with one another, and whether the overall structure is aligned to your goals and risk level is critical.
Many investors continue to hold underperforming funds without realising the impact they can have on long-term outcomes. Others may be invested in portfolios that are poorly diversified, too heavily concentrated, or simply not suited to changing market conditions.
That’s why professional advice plays a key role in ensuring portfolio quality and efficiency. Our team of regulated advisers provide investors with personalised, data-driven portfolio reviews that highlight areas of strength, pinpoint weaknesses, and help implement improvements that support long-term growth.
If you would like a free, no-obligation review of your current portfolio, you can book a call with one of our advisers using the link below:
By taking a proactive approach and reviewing your investments with an experienced adviser, you can ensure your portfolio is working as hard as it should be—now and into the future.
