Bargain hunter investors win in 2025 but not over long term

Bargain hunters were the most successful type of investor in 2025, topping AJ Bell’s annual Style League table with a return of 38.7%.  

Our analysis assumes that at the beginning of the year, the bargain hunter invests in the worst performing Investment Association (IA) fund sector of the previous 12 months. Latin America took the wooden spoon in 2025, falling by a quarter.

Coming into 2025 investor confidence was low as Mexico became the epicentre of tariff speculation associated with the incoming Trump administration. This drove valuations across the region to rock bottom levels.

Subsequently, a weaker dollar has eased inflationary concerns while investors are much more positive about the region today compared with 12 months ago.

How has bargain hunting performed over the long run?

Bargain hunting can be a high-octane strategy leading to extreme moves in both directions.  

Over the last decade the strategy has lagged the performance of simply buying a global index fund, represented by the international indexers strategy, which tops the long-term league table.

The last 10 years have been very favourable for trackers as the biggest companies in the market have performed well. If that trend were to go into reverse it could usher in better times for active strategies.

As the table shows, the IA Global sector average, represented by the global stock pickers investment style has struggled to keep up with its passive counterpart.  

Performance chasing also has done well

Not surprisingly, performance chasing strategies have worked well in momentum-driven markets where the strong get stronger. This strategy assumes an investor buys the best performing IA fund sector over the previous 12 months.

Heading into 2025 that was the Financials and Financial Innovation sector, which continued to perform well across the year, returning 15.8%. This highlights that following the performance chasing and bargain hunting strategies can lead to investments in niche areas of the market, which can come with higher risks.

How have contrarian and herd investors performed?

These strategies are defined by an investor buying the least and most popular sectors over the prior year. They have yielded similar results over the last decade.

While returning less than other strategies, these approaches have still almost doubled your money over 10 years, which is some consolation for bringing up the rear.

Corporate bond funds were the most popular sector in 2024, probably driven by multi-asset portfolios and financial advisers buying funds in this sector on behalf of customers.

The style delivered a respectable 7.1% in 2025 but this still left it rooted to the bottom of the style league table thanks to a strong showing for stocks.  

The least popular fund sector in 2024 was UK All Companies, which preceded an excellent 2025, with the sector returning 15.4% as it benefited from a strong year for UK stocks.

A rare win for egg spreading versus global indexing  

2025 was the first year that spreading your eggs across markets beat a global indexing approach since 2017, returning 16.8% compared to 13.0%, taking the runners-up spot in the league table.  

This diversified approach invests in a portfolio of funds equally representing five global regions: North America, the UK, Europe, Japan and Emerging Markets.