I've examined more than 1,000 investment funds over 25 years to see which are best. Here are my top 10, reveals money guru JEFF PRESTRIDGE

Over the past 25 years, I’ve written a weekly feature for Wealth on investment funds and trusts. Called Fund Focus, the objective is to give readers an insight into some of the funds they can use to bolster their investment portfolios.

Although I haven’t sat down and counted how many Fund Focuses I have compiled (that’s a task for retirement), I reckon it’s at least 1,000.

Of course, I cover some funds more than once. But all the Fund Focuses – this week’s is in the newspaper on page 58 – involve speaking to the manager at the helm, examining the investment record and digesting independent research published on the fund.

Sadly, not all the funds I examine go on to fulfil their potential – or live up to the spiel given to me by the manager. But many have provided handsome rewards to those who liked what they read and invested.

Yet Fund Focus is not a tipping column. Its objective has always been to give investors an insight into funds that might be on or off their radar. And I trust we achieve our mission.

A few weeks ago, I thought it might be a cathartic exercise to look back at the Fund Focuses I have written – and identify 20 funds which I think have shone the brightest. Not just in delivering satisfactory returns, but in terms of achieving results better than funds of a similar ilk.

The following 10 funds – a mix of investment funds and stock market-listed trusts – are my UK and European favourites. I will reveal the final 10 (rest of the world picks) next week. They are not recommendations, but funds which have shone for many years – and have the potential to do so for many more years yet.

If you have your own top fund list, and feel like sharing it, please send it to me at: [email protected]. Wishing you a profitable investment journey.

Edinburgh-based Aberforth Partners is a specialist investment house which focuses on running money invested in UK smaller companies – quoted, not unquoted, businesses.

It’s a lean, mean machine built around a tight, six-strong investment team. In total, it manages assets of £1.9billion, primarily spread across two investment trusts and an investment fund.

The flagship is the £1.1billion Aberforth Smaller Companies Trust, which later this year will be 35 years old. It is invested in 79 companies, with some familiar names in its portfolio – annuity provider Just Group and food manufacturer Bakkavor.

I looked at this trust nearly ten years ago when it was riding high – five-year investor returns of 120 per cent. But the subsequent investment journey has been trickier as a result of a subdued market in UK smaller companies. Since December 2015, returns generated have totalled 60 per cent.

Yet there are few other trusts or funds I would back to extract gains from this slice of the UK stock market (the bottom 10 per cent based on the market capitalisation of companies).

Recent returns, relative to rivals, are outstanding – 94 per cent over the past five years against a peer group average of 60 per cent. The investment managers also invest heavily in the funds they run: ‘skin in the game’ is always a good signal to investors that their money will be keenly managed. In addition, the trust has delivered 14 years of annual dividend growth.

Aberforth doesn’t court publicity, preferring instead to concentrate on looking after the financial interests of their investors. Frustrating for inquisitive journalists, but as the late Alan Steel (a super financial adviser) told me ten years ago when I had failed to get an interview with Aberforth: ‘I’m happy for them [Aberforth] to remain silent as long as their performance numbers impress.’

Aberforth Smaller Companies Trust is a great way to get exposure to UK smaller companies. The trust’s annual charges total 0.78 per cent.

There are few better UK equity income funds than Artemis Income. This £4.9billion fund is 25 years old next month and its success is largely down to the enduring ability of long-standing manager Adrian Frost – aided by Nick Shenton and Andy Marsh – to identify outstanding investment opportunities.

When I interviewed Marsh and Shenton in May 2021, the fund was in recovery mode after the economic lockdown of 2020 and dividend cuts applied by most of UK plc. Since then, it has generated steady returns for its investors, knocking spots off many of its rivals: returns of 37 per cent, compared with an average 24 per cent recorded by its peer group.

Income is paid to investors twice a year and is equivalent to about 4 per cent per annum.

The portfolio has few surprises with income-friendly stocks to the fore: the likes of London Stock Exchange Group, Tesco and Imperial Brands.

The fund’s strength is its lack of surprises. It represents a Steady Eddie play on the UK stock market. Artemis is also an outstanding independent investment house where the fund managers (like Aberforth) put their money where their mouth is – investing in the funds they run.

Among its fans is scrutineer Fund Calibre. It says Artemis Income has been ‘a stalwart of the UK equity income sector for two decades and has an excellent team, a strong process and a long-term track record’. The result, it adds, is the delivery of a ‘sustainable and durable income’.

Hargreaves Lansdown also includes it on its wealth shortlist of top funds, describing it as a ‘great core to an equity income portfolio’. Annual charges total 0.8 per cent.

This £2.3billion investment trust is a dead cert for income seekers.

Run for the past 34 years by Job Curtis of investment house Janus Henderson, it invests more than 90 per cent of its assets in the UK stock market. Long-term growth in investors’ capital and income is the objective – and it delivers.

Dividends, paid quarterly, have grown annually for the past 58 years – an achievement only matched by two other funds: Bankers and Alliance Witan. In the financial year to the end of June 2024, the dividend paid to shareholders totalled 20.6p a share. To put this into context, its shares trade at around £4.70.

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Given its income slant, the fund’s portfolio is not racy, but it comprises stocks you will be familiar with: the likes of HSBC, Shell, and British American Tobacco. It also has BAE Systems among its top holdings – a beneficiary of the push towards greater defence spending across Europe.

Returns since I looked at the fund in September 2019 are modest at just below 50 per cent, but this period embraces the sharp fall in stock markets as Covid forced most of the world into lockdown. Over the past five years (post the beginning of lockdown), returns are 78 per cent.

City of London’s appeal is four-fold: a Steady Eddie (we all need them in our portfolio); a fund manager who has been around the block more than once (backed by an impressive equity income team at Janus); low annual charges (0.37 per cent); and a stream of rising dividend income.

Both Fund Calibre and investing platform Interactive Investor include the FTSE250-listed fund in their respective top picks.

Fund Calibre loves its ‘conservative approach’, while Interactive describes it as a ‘compelling’ option for investors seeking a mix of income and capital growth from the UK stock market.

I love it. Rarely raved about, but the kind of fund you want at the heart of your investment portfolio.

It’s been a hard gig for Fidelity’s Alex Wright since he stepped into the shoes of the great Anthony Bolton – one of the country’s best UK investment managers of all time. Yet he has done more than an adequate job.

He is manager of £1.1billion investment trust Fidelity Special Values, which he has run since 2012 – and he has done an exceptional job. He has grown the trust’s income every year since taking over while nurturing steady returns from a portfolio focused on the UK stock market. It hasn’t been plain sailing for Wright, far from it, yet he has stuck to his policy of investing in undervalued stocks in the hope that they will realise their true value in time.

When I looked at the trust in May 2021, its share price had enjoyed a strong bounce after the market carnage of 2020. Since then, it has quietly delivered returns, comfortably outperforming its UK all companies peer group. Indeed, it has posted positive returns of 32 per cent, compared with the zero-return recorded by the average of its peer group.

Both Interactive Investor and Fund Calibre include it among their top funds. Interactive describes it as a ‘strong option for investors seeking a contrarian and value orientated approach to investing across the market cap spectrum of the UK market’.

Fund Calibre says the trust should appeal to investors looking for a ‘value play in the UK market, with a medium to long-term time horizon’. Annual charges total 0.7 per cent.

Since launching 21 years ago, the £1.8billion fund has remained in the capable hands of managers Clive Beagles and James Lowen.

Between them, they bring 65 years of experience to the investment party. They know how to run a UK equity income fund.

Although the fund’s portfolio comprises the usual income-friendly UK stocks – banks such as Barclays, HSBC and Lloyds and insurers Aviva, Legal & General and Phoenix – the managers run their fund better than many rivals.

Since I took a look at the fund back in November 2022, JOHCM UK Equity Income has generated a return of 30 per cent for investors – better than the 22 per cent for the average of its peer group.

Beagles and Lowen don’t bury their heads in the sand, regularly opining on prospects for the fund, the UK stock market and equity income investing.

I get more updates on their fund than any other: the latest telling me that the fund was the 13th best performing fund in the UK equity income sector over the past year; ranked in the second decile (top 10 to 20 per cent of UK equity income funds) over both three and ten years; the first decile over five years; and the best in its sector since launch in 2004.

Beagles is a delight to interview. His enthusiasm is infectious and, for investors, reassuring. Dividends are paid quarterly and the income on offer is just short of 5 per cent a year. A class fund.

This trust should appeal to those who like a mix of long-term capital growth and a rising income from their investments.

To date, it has notched 52 consecutive years of annual dividend increases and it doesn’t seem in a hurry to end this record. In the last financial year, it paid quarterly dividends totalling 35.4p a share (34.5p in the year before) and it has already declared a first quarter dividend for 2025 ahead of last year.

The fund’s overall returns are ahead of its UK equity income peer group over three, five and ten years. Respective returns over these time periods are 27, 75 and 90 per cent. When I looked at the trust more than ten years ago, it was managed by William Meadon and Sarah Emly, who sadly died in late 2017.

Today, Anthony Lynch, Callum Abbot and Katen Patel are at the helm, but it’s very much business as usual, carving out returns from a portfolio built around familiar income-friendly UK stocks (the likes of AstraZeneca, Barclays, HSBC, and Shell).

For the record, the fund has registered a 95 per cent return since my review in February 2015. Annual fund charges total 0.63 per cent and the trust has assets valued at £420million.

Like many of my favourite UK funds, JPMorgan Claverhouse is more steady than racy.

This trust is a portfolio diversifier. Indeed, I would say there is little in the investment world that comes close to matching its offer: a portfolio comprising income-friendly UK stocks which sits alongside its ownership of successful unlisted business Independent Professional Services (IPS).

In simple terms, the equity portfolio (accounting for around 80 per cent of the trust’s assets) provides a mix of capital and income return – and is managed by James Henderson and Laura Foll at Janus Henderson.

IPS, a provider of services to companies – such as company secretarial duties and pension trusteeship – throws off a revenue stream which helps boost the trust’s ability to furnish shareholders with dividends.

For the past 15 years, the £1.2billion trust has grown its annual dividend. For the past 46 years, it has either maintained or grown it.

Since my report on the trust in July 2019, the trust has generated total returns approaching 100 per cent – twice better than the average for its UK equity income peer group. Over the past five years, returns have totalled 126 per cent.

It’s a trust that you need to get your head around. But once you do, it makes perfect sense. Dividends are paid quarterly and in the last financial year (to the end of 2024) totalled 33.5p a share. To put this income into perspective, the shares trade at around £9.15. Annual total charges are reasonable at 0.5 per cent.

Quirky? Yes, and maybe that explains why it doesn’t register on the ‘best buys’ of most investment platforms. But is it good? Not half.

Under the stewardship of asset manager Redwheel, investment trust Temple Bar is enjoying a rich vein of form – and there is little reason to see why it can’t continue.

In Ian Lance and Nick Purves, the £850million trust has a pair of shrewd managers at the wheel. Their modus operandi is to bargain hunt – find undervalued companies, invest in them, and then patiently wait for the value to come through.

When I reviewed the trust in January 2021, Lance and Purves had been in situ for two months. They had inherited a portfolio badly impacted by lockdown and they hadn’t hung around changing it.

The number of stocks had been reduced from 50 to 30, with the emphasis on holding companies whose share price did not reflect their ability to generate earnings over the next few years. Current holdings total 35. The results have been outstanding: a subsequent return in excess of 80 per cent – compared with 35 per cent from its UK equity income peer group.

Financial stocks dominate the portfolio: Barclays and NatWest are among the trust’s biggest holdings. These banks, says Lance, have turned a corner and he believes they will ‘continue to compound significant value for shareholders over time’.

This trust is the antithesis of growth investment funds with exposure to US tech companies. It makes a great piece of an investment jigsaw. Ongoing charges are reasonable at 0.61 per cent.

Since I reviewed this investment trust in August 2019, it has undergone a name change: from European Values to plain old European. But under its bonnet, little has altered with Sam Morse continuing to pull the fund’s strings, assisted by Marcel Stotzel (appointed in September 2020). Morse has run the fund for more than 14 years.

Many of the top 10 holdings of more than five and a half years ago are still dominant in the portfolio – the likes of Swiss food and drinks giant Nestle, Dutch semi-conductor company ASML and French cosmetics company L’Oreal. This reflects Morse’s preference to stick with strong corporate brands that have resilient balance sheets and a capacity to pay dividends. Sticking, rather than twisting, is his investment mantra.

It’s working, judging by the 14 years of annual dividend growth that the trust has under its belt – and its strong performance. Since August 2019, it has recorded overall returns in excess of 80 per cent. Over the past five years, it has made total gains of 95 per cent.

Interactive says the trust is an ‘attractive option’ for investors wanting exposure to European shares. Fund Calibre describes it as a ‘very solid core fund’. This £1.6billion fund is a portfolio mainstay which will appeal to those wanting a steady stream of income (paid twice a year) – plus capital return – from a portfolio of quality European companies. Total annual charges are 0.77 per cent.

When I reviewed this £490million trust in October, it was two-and-a-half years into a radical makeover. This had resulted in a simplification of its share structure (two classes consolidated into one); the ongoing charges taking a haircut; and a name change from European to European Growth & Income.

Today, the fund is in rude health. Since October, it has generated returns of 18 per cent and, post makeover, it has registered gains in excess of 50 per cent. Against rival European trusts, its performance numbers look impressive.

The portfolio is managed by Timothy Lewis, Alexander Fitzalan Howard and Zenah Shuhaiber, who use a mix of in-house quantitative research and qualitative analysis to buy and sell stocks. As Lewis told me last October, the result is a clearly defined investment process. ‘The quantitative research,’ he said, ‘is an ideas generator which then allows us to do some digging into the stocks we like.’

Top-ten holdings include German software company SAP and Swiss pharmaceuticals giant Roche.

Dividend payments are designed to rise as the trust’s assets increase in value. In the financial year to the end of March just gone, it paid quarterly dividends totalling 4.8p a share, compared with 4.2p in the previous year. A trust redesigned to give it wider income appeal. Ongoing charges are a tad under 0.7 per cent.

• All figures correct at the time of writing.