Chinese equity funds rise as North American strategies fall in FE fundinfo's latest Crown Ratings rebalance

FE fundinfo today announced the results of its latest Crown Ratings rebalance. North American equity funds recorded some of the sharpest downgrades of the rebalance, while a cluster of Chinese equity funds moved sharply in the other direction. Real estate funds continued to struggle, while technology remained the strongest-performing sector overall.

The first half of 2026 marked a turning point for global equity markets. While AI and technology continued to support returns, investors began looking beyond the narrow group of US mega-cap stocks that have dominated portfolios in recent years. Improved sentiment towards Chinese equities, alongside heightened geopolitical uncertainty and shifting expectations for global growth, created a much broader set of winners and losers than investors have become accustomed to. 

New 5-Crown funds

Seven funds achieved 5-Crown status for the first time in this rebalance, offering an early signal of where conviction is building among newer or previously unrated strategies. These include IFSL 7IM Defensive Strategy, MGTS SIIION Cautious, WS Zennor Japan Equity Income and MF Vela Defensive. 

The additional three of the seven funds in this category, MI Classic Passive Portfolio Aggressive, MI Global Passive Portfolio Aggressive and MI Global Portfolio Aggressive, are managed by Tatton Investment Management.

Sectors

The sector data highlights a divergence in Crown Ratings outcomes across regions and asset classes. Chinese equity funds generally improved their ratings while North America saw widespread downgrades and real estate remained out of favour.

Among the biggest sectors (50+ funds), IA North America was the weakest-rated sector in the rebalance. Just 2% of its 146 funds hold a 5-Crown rating, and over half sit at the bottom of the scale - a sharp drop from 10% of funds in the sector holding a 5-Crown rating at the last rebalance in January.

IA China/Greater China told a different story. While over a third of funds in the sector sit at the bottom of the ratings scale, almost a quarter now hold 5-Crown status, one of the highest concentrations of any sector. Funds such as RBC Funds (Lux) China Equity moved from the bottom rating to the top in a single rebalance.

Real estate funds were a mixed picture. IA Listed Property saw positive growth this rebalance with 16 funds improving their Crown rating, whilst IA Direct and Hybrid Property struggled. Several individual funds in this space also saw steep downgrades, with abrdn European Real Estate Share and Cohen & Steers European Real Estate Securities both falling from 5-Crown to 1-Crown status.

IA Technology & Technology Innovation was the strongest-rated sector overall, with more than a third of its funds holding a 5-Crown rating and none at the bottom of the scale.

Fund groups

These sector shifts are also visible at the fund group level, with some managers gaining 5-Crown funds at pace while others saw their ratings fall away entirely.

Premier Miton Investors recorded the largest increase in 5-Crown funds of any group, rising from two to eight. Legal & General UT Mgr Ltd also grew its 5-Crown count significantly, from four to nine.

The Columbia Threadneedle Investments and Fidelity International's Luxembourg ranges lost all of their previously 5-Crown rated funds. Other Columbia Threadneedle and Fidelity fund ranges, including Threadneedle Investments Services Ltd and FIL Investment Services UK Ltd, continue to hold 5-Crown ratings.

Top performing fund groups

The July Crown Rebalance emphasises that consistent high performance isn't only the preserve of the largest fund groups, as several mid-sized and specialist managers are matching or outperforming the industry's biggest names on both quality and scale.

Note: The table above represents the highest-performing fund groups managing 10 funds or more.

Zachary Ryan, Head of Research at FE Investments, said: "Market leadership rarely changes all at once, but when it does, it often challenges some of the assumptions investors have become most comfortable with. This rebalance suggests we're entering a period where regional and sector leadership is becoming much less predictable, making diversification and disciplined portfolio construction more important than simply backing what has worked historically.

"Crown Ratings are built around consistency and risk control, not just raw returns, so they tend to favour funds that have outperformed across successive periods rather than in a single strong period. That discipline is especially valuable when leadership is rotating, because it helps investors focus on funds that have earned their performance rather than funds that were simply in the right place at the right time." 

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​​Methodology  

FE fundinfo’s Crown Ratings are quantitative ratings ranging from one to five, designed to help investors identify funds which have displayed superior performance in terms of stockpicking, consistency and risk control. Crown Ratings are updated twice a year - in January and July - and apply across all major FE fundinfo universes, including unit trusts and OEICs, investment trusts, life funds, pension funds and offshore funds.

Each fund is assigned a Crown Score built around three core pillars: Alpha, which measures outperformance against a relevant benchmark; Volatility, which assesses risk-adjusted returns; and Consistency, which looks at how reliably a fund has delivered returns across successive quarterly periods. All calculations are made relative to an appropriate benchmark, ensuring meaningful comparisons within each asset class.

Ratings are awarded based on a percentile distribution of scores:

• Top 10%: 5 Crowns

• Next 15%: 4 Crowns

• Next 25%: 3 Crowns

• Next 25%: 2 Crowns

• Bottom 25%: 1 Crown

The Crown Ratings are one of FE fundinfo’s key investment rating metrics, including Alpha Manager Ratings and the FE AdviserAsset Platinum Ratings, providing a range of well-established and impartial benchmarks to empower the financial ecosystem in making informed decisions.

For more information about methodology, please visit Ratings | FE fundinfo.