By Debbie Carlson

Last year gave savvy fund managers an ideal chance to prove their worth.

Things started off well for the stock market. Then they took an abrupt turn for the worse.

Anticipating Federal Reserve interest-rate cuts, tax cuts, and deregulation, most asset managers expected 2024's gains to persist. The good vibes proved to be short-lived after China, in January, unleashed a much cheaper artificial-intelligence model called DeepSeek to rival the lavishly hyped OpenAI. Then, in April, President Donald Trump's Liberation Day tariff announcements sent stocks and bonds spiraling downward.

Yet like an experienced climber who uses precise movements to find strong toeholds before advancing, the top active fund managers in Barron's annual Best Fund Families survey relied on their processes and research to uncover bargains across asset classes, profiting when markets rebounded.

As 2025 progressed, stock leadership changed, and a commitment to diversification and owning underappreciated names proved prescient. It was the first time in a few years that asset managers didn't have to own all Magnificent Seven stocks to just keep up with the indexes.

Capital Group ascended to the No. 1 spot by taking advantage of mercurial markets and seeing long-term bets pay off.

Martin Romo, Capital Group's chair and chief investment officer, says that while the Magnificent Seven companies still matter, he sensed markets would broaden in 2025, based on the firm's global research, which had been revealing better opportunities beyond the stretched valuations of the Big Tech names.

"If you went outside of tech, outside the U.S., outside the big companies, and looked for a little bit more value instead of just growth, it led us down a path to find these opportunities," he says.

Nimbleness and diversification were also hallmarks of the four other fund families that successfully scaled to our top-five summit in 2025. Coming in No. 2 through No. 5, respectively, were Fidelity Investments, Vanguard Group, Northern Trust Asset Management, and Lord Abbett.

For bond managers, 2025 was finally a year in which markets normalized and higher yields boosted returns, says Roger Hallam, global head of rates at Vanguard. "The backdrop for bonds today is just very different from where we've been over much of the post-financial-crisis regime," he says.

Early market turmoil aside, 2025 was a pretty good year for investors. According to LSEG Lipper data, the average U.S. equity fund rose 14.9%, while world equity funds gained 29%. Taxable bond funds rose 6.5%, while municipal bond funds returned 3.7%. Mixed-asset funds rose 15.5%.

Barron's has conducted its annual survey of fund families for more than 20 years, focusing on calendar-year relative performance for the primary ranking, which offers a glimpse of how diversified firms perform across a wide range of actively managed funds. It's a snapshot in time. As usual, though, several of the top families' biggest and best-performing funds of 2025 also demonstrate strong longer-term returns.

Because the Best Fund Families results are asset-weighted, firms' largest funds have the biggest impact on their rankings.

This year's survey welcomed Northern Trust Asset Management to the top five for the first time in recent years, while Capital Group and Vanguard returned for the first time since 2022 and 2020, respectively. Fidelity moved up from No. 3 in 2024, and Lord Abbett moved down to No. 5 from the top spot.

This Year's List

To be included in the ranking, firms must have offered at least three actively managed mutual funds or active exchange-traded funds in Lipper's general U.S. stock category, plus one in world equity and one mixed-asset, such as a balanced or asset-allocation fund. They also needed to offer at least two taxable bond funds and one national tax-exempt bond fund. All funds on our list must have a track record of at least one year. The ranking also includes "smart beta" ETFs, which are run passively but built on active investment strategies. The list reflects each firm's active-management ability.

All told, just 46 asset managers out of the 795 in Lipper's database met our criteria for 2025. There were a few changes to this year's list. Simplify debuts at No. 41, and it is the first time an all-ETF asset manager had enough funds across asset classes to qualify. Its inclusion demonstrates how active ETFs are becoming a bigger part of the asset-management industry after they were approved by the Securities and Exchange Commission in 2019.

Nomura Asset Management is the other newcomer, joining the list after acquiring Macquarie's U.S. asset-management business. We said goodbye to Amundi, as it is now part of Victory Capital Management. Madison Funds and Neuberger Berman were dropped, as they no longer have enough qualifying funds to be included.

Many other large fund managers are consistently absent because they don't check all of the boxes in the categories we consider. Notable names in that category include Janus Henderson and Dodge & Cox.

No. 1: Capital Group

Capital Group runs the American Funds -- some of the biggest funds by assets in the U.S. -- and because Barron's results are asset-weighted, strong showings by its top funds catapulted the firm to our top spot.

The firm manages the biggest mixed-asset fund in the survey, the $274.8 billion American Balanced fund. Its 18.8% return bested 91% of its Lipper peers, as it owned some of 2025's big winners in its top 10, including Taiwan Semiconductor Manufacturing and memory-chip maker Micron Technology, the second-biggest S&P 500 gainer with a 240% return. Its No. 11 holding was South Korean semiconductor SK Hynix, which returned 286%.

The asset manager's largest general-equity fund, the $336.4 billion Growth Fund of America, also contributed to its 2025 win. The fund beat 88% of its Lipper peers with a 20.2% return. In addition to owning Broadcom and Alphabet in its top 10 holdings, it also held Micron.

Capital Group has $2.8 trillion across its 102 U.S.-listed active mutual funds and ETFs. The firm splits investment duties across multiple managers in each fund, carving out a slice for each manager to invest in their highest-conviction ideas. A principal investment officer oversees the fund's makeup to ensure balance and commitment to mandate.

Names like Taiwan Semi and SK Hynix exemplify how Capital Group broadened its holdings beyond U.S. megacap technology names and still found strong returns, Romo says.

The universal theme behind 2025's performance came from managers relying on Capital Group's deep global research to stay confident during uncertainty, whether it was having a long-term outlook on an unloved stock or buying when the market swooned, he says.

Romo is also the principal investment officer of the $178.4 billion Investment Company of America fund, which gained 20.8% in 2025, beating 91% of its Lipper peers. He says his long-term picks of GE Aerospace and Royal Caribbean Group paid off in 2025, and he used the April selloff to increase positions in Nvidia and Eli Lilly.

Among the winning moves Capital Group made in fixed income in 2025 was playing the differences between U.S. and German bond yields and using the tariff announcement to increase their credit exposure.

No. 2: Fidelity Investments

The April tariff-ignited market rout reverberated across equites and fixed-income markets. In the heat of the moment, the selloff felt different than other corrections, says Robin Foley, head of Fidelity's fixed-income division.

"It was kind of a strange time," she says. "When the market goes volatile, it becomes more important than ever to get together and understand what's happening."

The uncertainty of how tariffs would shake out led Fidelity equity managers to revisit the deep research the asset manager is known for and think long term. Brian Enyeart, co-head of equity, says portfolio managers focused on pair trades, swapping out good names for better ones, as well as looking for potential secular winners and repositioning portfolios.

Early volatility aside, Enyeart says shifts in market leadership helped many growth, core, and value managers to outperform their indexes.

Once again, Fidelity's biggest general-equity fund, the $176.3 billion Contrafund, outperformed, beating 93% of its Lipper peers with a 21.8% gain. In a fourth-quarter commentary, manager Will Danoff attributed the quarter's gains to holdings in Elon Musk's private Space Exploration Technologies; electronic and fiberoptic connectors manufacturer Amphenol, one of the S&P 500's biggest gainers with a 96% return; and to selling its small position in Oracle. The legendary manager will retire at the end of 2026, with Asher Anolic and Jason Weiner, his co-managers since April 2025, taking over.

Foley says fixed-income managers found opportunities during April's volatility but didn't jump to execute trades as bond markets were fragmented. Agency mortgage-backed securities and investment-grade bonds were standouts for the team. Strong earnings translated to strength in corporate bonds, and across sectors Fidelity saw good bond yields relative to Treasuries, without sacrificing credit quality.

Fidelity has $6.8 trillion in assets and more than 525 ETFs and mutual funds. For many asset managers, ETFs are becoming a bigger part of the business, and that's true for Fidelity. The firm has 77 ETFs, with more than $150 billion in assets, says Greg Friedman, head of ETF management and strategy. The $24.5 billion Fidelity Total Bond ETF is one of the biggest, similar to the $42 billion Fidelity Total Bond fund.

Friedman says ETFs are attracting a younger, different investor than a traditional mutual fund buyer, rather than seeing mutual fund investors swap for cheaper ETFs. "They have different demands and different needs, " he says.

No. 3: Vanguard Group

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February 26, 2026 01:00 ET (06:00 GMT)

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