Investors who bought Liontrust European Dynamic and/or Artemis SmartGARP European Equity last year have enjoyed strong returns in the first half of 2026.
The two strategies were among the most-bought IA Europe excluding UK funds of 2025 and were the only two of the 10-strong list below that managed to beat their sector average as well as their passive counterparts.
Trackers did what they are built to do, sitting in the middle of the pack rather than leading or lagging it, but in the active camp, some of 2025's popular picks struggled to keep up.
In this series Trustnet is looking at whether investors have had immediate success with their fund picks from 2025. Here we looked at last year’s most popular European funds.
Source: FinXL
Active leaders
Liontrust European Dynamic topped the table at 12.6%. The £2.8bn fund is run by FE fundinfo Alpha Manager duo James Inglis-Jones and Samantha Gleave and carries a maximum FE fundinfo Crown Rating of five.
The process is built on academic research showing cashflow is the key driver of share price performance, FE Investments analysts explained, adding that the managers have delivered “a stellar performance track record” that holds up “regardless of the macroeconomic backdrop”.
In a similar vein, Artemis SmartGARP European Equity returned 11.3%. At £2bn it is run by Alpha Manager Philip Wolstencroft and also holds five crowns.
Square Mile analysts said the fund offers “an all-cap European ex UK portfolio with a value bias using a well-established and proven process”, built around eight factors, of which earnings revisions and valuation carry the most weight.
The analysts noted the fund's transaction costs run higher than peers but said this is “more than compensated for by superior returns over a full market cycle”.
Passive mid-fielders
The three trackers on the list clustered close to the sector average of 8.9%. Abrdn European Equity Tracker was up 10.1%. Just behind HSBC European Index gained 10%. It is the largest fund in the entire group at £7.7bn and is the cheapest on the list with an ongoing charges figure (OCF) of 0.06%.
FE Investments analysts noted HSBC's index range typically uses full replication as its tracking method and pointed to the group's exclusion of controversial weapons manufacturers as a modest source of tracking difference.
Vanguard FTSE Developed Europe ex-UK Equity Index returned 9.8%, just shy of the sector average.
Active laggards
The remaining five active funds all fell short of the sector average in the opening half of the year, although their backers can point to the short-term nature of analysing a six-month period.
All made positive returns, however, with the strongest coming from WS Lightman European, which was up 7.5%. The fund is included on the AJ Bell Recommended Funds best-buy list, with analysts noting that despite being run by a boutique asset manager, manager Rob Burnett is an “experienced fund manager” with a “tried and tested investment approach underpinned by a clear investment philosophy”.
“The fund is typically invested in lower valued stocks and the performance profile is therefore likely to be volatile and different to that of the benchmark,” they noted.
At the other end of the list, M&G European Sustain Paris Aligned props up the table with a 5% return. It is recommended by analysts at FE Investmnets, who said it has a “deliberately balanced split between stable growth and opportunity holdings”, with a focus on reducing portfolio carbon emissions.
“The lack of a strong bias to fast-growing companies differentiates the fund from sustainable competitors and the focus on reducing carbon emissions is well-defined with clear metrics against which to judge performance. The fund could be held as a core European holding in a diversified portfolio of funds,” they said.
The other popular funds in 2025 to underperform the peer group in 2026 so far are HL Multi-Manager European, BlackRock Continental European Income and Quilter Investors Europe ex-UK Equity Growth.