Fallen Funds Rise to Sector Leader Status in 2025

Trustnet highlights funds that lost money in 2024 but top their sector in 2025 as markets shift with policy and inflation signals.

Fallen Funds Rise to Sector Leader Status in 2025

Trustnet identifies 38 funds from the Investment Association's equity sectors that posted losses in 2024 but sit in the top quartile for 2025 so far. The shift comes as markets move past high inflation and divergent rate paths toward a softer path for rates and a more constructive sentiment. At the top of the list is WS Amati Strategic Metals, which fell 7.1 percent in 2024 yet earns a near 50 percent total return in 2025. The £50 million fund focuses on companies that earn revenue from strategic metals such as gold, copper, nickel, silver and lithium and underscores how supply concerns can alter risk premia.

The rebound is not limited to metals. Other IA Commodity/Natural Resources funds and global funds tied to energy transition themes have also shifted from losses to leadership. The metals rally is supported by stronger gold prices, while base metals like copper and lithium benefit from a steadier outlook for demand. The report also notes that value oriented funds such as Jupiter Global Value Equity have started to close the gap with growth, aided by European markets outperforming the US and by expectations that rate cuts will come earlier in Europe. Fund manager Brian McCormick cautions that US valuations look expensive by historical standards even as investors chase growth stories.

Overall, the picture shows a market where niche sectors and global themes can leapfrog in a single year, while traditional benchmark bets face renewed scrutiny as policy signals and energy transitions drive new risk premia.

What stands out is the speed of shift. Funds once tied to the US growth engine are being rebalanced toward value, dividends, and concrete earnings. The rotation toward metals and energy transition plays reveals how policy signals and commodity cycles can reshape winners. Yet this is not a blanket endorsement of all trend bets; it is a reminder that timing and discipline matter when markets swing between inflation highs and rate cut expectations.

The broader takeaway is a push toward diversification. If 2025 proves to be a year of rotation rather than a single driver, investors will need to balance high conviction bets with protected exposure to regions and sectors that carry different cycles. The spotlight on smaller companies and resources also carries a political dimension if policy support shifts, so a careful read on relative valuations remains essential.

Highlights

Markets shift, but the pace of change is what tests investors most.