With Chinese AI taking center stage at the start of 2025, China equity became the best performing fund category in February.
China equity funds account for the entire top 30 of the best performers in our dataset of funds available to UK investors, and the China equity category on average rose 9.55% in February.
Among the 3,200 funds with a Morningstar rating available for sale to UK investors, returns ranged from 14% in gains to losses of 15%. Overall, a third of the fund universe achieved a positive February.
Andrew Swan, head of Asia (ex-Japan) equities at Man Group, says: “At first glance, Trump’s tariffs may cloud the outlook, but there are many conditions in place for a material shift in Chinese equities’ earnings expectations.”
Tariffs Knock US Stocks
At the bottom we find a mix of US equity funds, which have battled the uncertainty of Trump tariffs and interest rate decisions. And these funds continued to fall at the start of March as tariffs took effect and countries like China, Mexico and Canada retaliated.
India equity strategies also featured among the laggards. The domestic market has had a strong run over the past few years, but according to James Thom, investment director of Abrdn New India Investment Trust ANII, we could be seeing “the first tinges of doubt” creeping into a rosy growth picture.
“The economy is showing signs of a slowdown, the stock market has corrected sharply in recent months and near-term earnings expectations have been muted. Multiple factors have contributed to this apparent slowdown, including weaker than-expected consumer demand and reduced public spending, as well as relatively soft government revenue.”
China Funds Top the February Performance Table
Redwheel China Equity Fund
The actively managed Redwheel China Equity Fund gained 13.02% in February, outperforming the average fund in the China equity category, which rose 9.55%. The fund placed in the 25th percentile for performance and beat its benchmark, the Morningstar China Target Market Exposure Index, by 2.87 percentage points. The £17.8 million fund has gained 13.06% year to date, while the average fund in its category is up 11.38%. Over the past five years, the Redwheel fund has climbed 2.39%, compared to the 0.47% loss for the category.
RBC Funds (Lux) - China Equity Fund
In February, the actively managed RBC Funds (Lux) - China Equity Fund rose 10.81%, while the average China equity fund gained 9.55%. The fund placed in the 11th percentile for performance and beat its benchmark, the Morningstar China Target Market Exposure Index, by 0.66 percentage points. The £3.9 million fund has climbed 13.89% year to date, outperforming the average fund in its category, which rose 11.38%. Over the past five years, the RBC fund is up 2.78%, while the average fund in its category is down 0.47%.
GAM Multistock - China Evolution Equity
The actively managed GAM Multistock - China Evolution Equity gained 10.5% in February, outperforming the average fund in the China equity category, which rose 9.55%. The fund placed in the 44th percentile for performance and performed roughly in line with its benchmark, the Morningstar China Target Market Exposure Index. The £42 million fund has gained 12.67% year to date, while the average fund in its category is up 11.38%. Over the past five years, the GAM fund has climbed 3.07%, compared to the 0.47% loss for the category.
Pictet - China Index
In February, the passively managed Pictet - China Index rose 10.17%, while the average China equity fund gained 9.55%. The fund placed in the 18th percentile for performance and performed roughly in line with its benchmark, the Morningstar China Target Market Exposure Index. The £299.5 million fund has climbed 12.0% year to date, outperforming the average fund in its category, which rose 11.38%. Over the past five years, the Pictet fund is down 0.42%, while the average fund in its category is down 0.47%.
HSBC Global Investment Funds - Chinese Equity
The £571.3 million HSBC Global Investment Funds - Chinese Equity rose 10.05% in February. The gain on the actively managed fund beat the 9.55% gain on the average fund in the China equity category, leaving it in the 46th percentile for performance. The fund performed roughly in line with its benchmark, the Morningstar China Target Market Exposure Index. Year to date, the HSBC fund rose 12.09%, while the average fund in its category rose 11.38%. Over the past five years, the fund has dropped 0.34%, compared to the 0.47% loss for the category.
US and India Funds Saw the Biggest Losses in February
Artemis US Smaller Companies Fund
In February, the actively managed Artemis US Smaller Companies Fund fell 14.66%, while the average US small-cap equity fund lost 8.36%. The fund placed in the 100th percentile for performance and fell further than its benchmark, the Morningstar US Small Cap Extended Index, by 8.73 percentage points. The £1.2 billion fund has dropped 8.84% year to date, falling further than the average fund in its category, which fell 4.45%. Over the past five years, the Artemis fund is up 9.88%, while the average fund in its category is up 10.15%.
American Century US Focused Innovation Equity Fund
The actively managed American Century US Focused Innovation Equity Fund lost 13.15% in February, falling further than the average fund in the US large-cap growth equity category, which fell 6.01%. The fund placed in the 100th percentile for performance and fell further than its benchmark, the Morningstar US Large-Mid Cap Broad Growth Index, by 8.15 percentage points. The £76 million fund has lost 9.15% year to date, while the average fund in its category is down 1.72%. The Nomura fund was launched in June 2021.
Stewart Investors Indian Subcontinent All Cap Fund
In February, the actively managed Stewart Investors Indian Subcontinent All Cap Fund fell 12.7%, while the average India equity fund lost 7.93%. The fund placed in the 98th percentile for performance and fell further than its benchmark, the Morningstar India Target Market Exposure Index, by 3.33 percentage points. The £1.9 million fund has dropped 16.88% year to date, falling further than the average fund in its category, which fell 12.27%. Over the past five years, the First Sentier Investors fund is up 12.01%, while the average fund in its category is up 10.84%.
Alger SICAV - Alger Weatherbie Specialized Growth Fund
The £2.6 million Alger SICAV - Alger Weatherbie Specialized Growth Fund fell 12.56% in February. The loss on the actively managed fund was worse than the 8.36% loss on the average fund in the US small-cap equity category, leaving it in the 96th percentile for performance. The fund fell further than its benchmark, the Morningstar US Small Cap Extended Index, by 6.63 percentage points. Year to date, the Alger Management fund fell 8.06%, while the average fund in its category fell 4.45%. Over the past five years, the fund has climbed 4.01%, compared to the 10.15% gain for the category.
abrdn North American S&M-Cap Eq Fund
The actively managed abrdn North American S&M-Cap Eq Fund lost 11.76% in February, falling further than the average fund in the US large-cap growth equity category, which fell 6.01%. The fund placed in the 99th percentile for performance and fell further than its benchmark, the Morningstar US Large-Mid Cap Broad Growth Index, by 6.76 percentage points. The £50.7 million fund has lost 4.2% year to date, while the average fund in its category is down 1.72%. Over the past five years, the abrdn fund has climbed 7.76%, compared to the 14.47% gain for the category.
This article was generated with the help of automation and reviewed by Morningstar editors. Learn more about Morningstar’s use of automation.
