Cheap and actively managed can seem like a contradiction. The conventional view is: if you want low fees, you go passive, but if you want a manager’s judgement, you pay for it.
Yet investors don’t necessarily have to choose between low costs or active oversight.
This new Trustnet series highlights active funds that sit in the cheapest decile among their actively managed peers in the sector, while also ranking in the top decile for 10-year total returns across the entire sector, calculated to the end of May 2026.
Within UK equity funds, investors who opted for the cheapest active funds would have enjoyed a higher average 10-year total return than if they had backed the most expensive.
In the IA UK All Companies sector, the average 10-year return for the least and most expensive was 121.1% and 90.5% respectively. For the IA UK Equity Income sector, the difference was slightly less distinct, with the cheapest averaging 98.8% over 10 years and the most expensive 95.2%.
However, only three funds across both sectors met the criteria of being both one of the cheapest actively managed funds and one of the top returners among their peers.
Source: FE Analytics
IA UK All Companies
The IA UK All Companies sector produced two qualifying funds.
The strongest 10-year return in the table was posted by Dimensional UK Value, which gained 184.2% and has an ongoing charges figure (OCF) of 0.34%.
The £325.3m fund’s philosophy is rooted in academic research rather than discretionary stock selection, with the management team applying systematic rules to capture long-term drivers of return.
The strategy tilts towards value, which has translated into a strong income profile. Over the past five years to the end of 2025, Dimensional UK Value has paid out £2,270 per unit – the highest dividend distribution in the sector. It was also identified as having one of the highest information rations in the peer group over that five-year period, outperforming on both the upside and downside.
Its sector exposures lean toward financials, energy and materials, with large positions in Shell, HSBC and BP, while information technology accounts for just 0.1% of the portfolio.
Performance of the fund vs sector over 10yrs
Source: FE Analytics
Dimensional UK Value has also continued to perform strongly so far in 2026, gaining almost 11% – the third-best return in the sector.
While the Dimensional strategy’s approach is systematic and factor-driven, Invesco UK Enhanced Index (UK) sits somewhere between active and passive management by deploying a systematic, rules-based process designed to enhance index returns rather than rely on traditional stock-picking.
With an OCF of 0.23%, the £1.7bn fund has delivered a top-decile 10-year return by targeting three factors – momentum, quality and value. This means the managers, FE fundinfo Alpha Manager Georg Elsäesser and Michael Rosentritt, manage the fund with the view that cheap stocks outperform expensive ones, trends will persist long-term and high-quality companies will outperform lower-quality peers.
RSMR analysts said the managers achieve similar volatility characteristics to passive investment by “optimising the portfolio for the three factors which they believe will produce better returns characteristics,” and noted that the fund is suitable as part of a UK equity allocation for an investor seeking “an all-weather approach to investing in UK companies”.
The strategy is currently overweight financials, with HSBC as its top portfolio holding. Other UK large-caps in the top 10 of the portfolio include AstraZeneca, Rolls-Royce and British American Tobacco.
Invesco UK Enhanced Index (UK) has a 2.8% historic yield and is also in the top-decile for returns in the IA UK All Companies sector over one, three and five years to the end of May 2026.
Earlier this year, the fund was highlighted for having one of the lowest downside captures in its sector against the FTSE All Share, meaning it limits losses effectively when the market drops.
Performance of the fund vs sector and benchmark over 10yrs
Source: FE Analytics
However, neither fund is the cheapest actively-managed fund available in the IA UK Equity Income sector – that spot is occupied by Royal London UK Core Equity Tilt, with an OCF of 0.08%. However, it narrowly missed the cut on performance, with a second-decile 10-year return of 135.5%.
IA UK Equity Income
Only one fund in the IA UK Equity Income sector met the criteria of combining low fees with top-decile long-term returns.
The sole qualifier, UBS UK Equity Income, takes a more traditional route than the other two funds in the table. It is the most expensive of the three funds in the table, with an OCF of 0.59%, alongside a 148.5% return.
The fund was launched in 2012 and is now £426m in size. Co-managed by Chloe Hickey-Jones and Jessica Kaur, supported by Steven Magill, the team aims to outperform the FTSE All-Share after charges over three to five years, screening a universe of around 500 UK stocks to arrive at a concentrated portfolio of 40 names.
Similarly to the other two funds in the table, the UBS strategy has its highest sector exposure to financials, with HSBC again among the top holdings at 9.9% – the largest weighting of the three strategies.
The management team utilises a fair-value screen to quantify a stock’s intrinsic value relative to current prices, picking those whose share prices have materially underperformed the UK index or been affected by news-driven price moves.
RSMR analysts praised the team’s “gradualist approach” of buying and selling stocks and the focus on the fair value to assess the inherent opportunity.
They added: “The fund can be used as a core holding and is a good candidate to be blended with either an index, growth or quality orientated fund. Using the fund in conjunction with others should offer a good balance to a UK allocation, with value-oriented market regimes providing ideal conditions for this fund to perform strongly.”
Earlier this month, the UBS UK Equity Income was highlighted for its top-quartile return over the five years to the end of 2025, alongside its growing and above average income, having paid £2,928.34 in dividends during the assessed period.
Performance of the fund vs sector and benchmark over 10yrs
Source: FE Analytics
Although UBS UK Equity Income is the only fund in the sector to meet the dual criteria, it is not the cheapest active option overall. That distinction belongs to M&G Charifund, which has an OCF of 0.47% and a 120.2% 10-year return, placing it in the third decile of the sector.
At the other end of the spectrum, Courtiers UK Equity Income charges 1.5% and returned 118.5% over the decade.