The Daily Telegraph - Saturday - Money
Funds that weathered far worse than this...
Events in America make some investors nervous – a good time to seek out consistent fund managers. James Connington reports
Donald Trump’s win in the US presidential election means that we can expect plenty of uncertainty in stock markets. At times such as these investors tend to seek safety by entrusting their money to experienced fund managers who have successfully navigated previous bouts of economic or political turbulence.
Here, Telegraph Money identifies the fund managers who have proved best able to navigate tricky markets and outperform their peers.
Our list names the fund managers who have most consistently outperformed markets across their entire careers. Beating peers and the market over an extended period is a feat that few managers are able to pull off.
The ranking, created by Tilney Bestinvest, the investment shop, uses four factors. It looks at fund managers’ average monthly outperformance relative to their peers over five years and over the manager’s full career; the percentage of months in which they have beaten their peer group; and their years of experience in the sector.
The best managers back stocks they expect to deliver over the longer term, regardless of short-term market reactions, and are not afraid to take advantage of a fall in markets to buy stocks cheaply.
Many in the ranking ran funds through the financial crisis, so have navigated far more dramatic market turmoil than today’s. We highlight the top five managers in six different investment areas. In the global sector, Fundsmith’s Terry Smith and Lindsell Train’s Michael Lindsell will be names familiar to many investors. However, James Thomson, who manages Rathbone Global Opportunities, may be a less familiar name. His fund, which charges 0.8pc annually, is largely concentrated in the shares of companies in America, Europe and Britain. Since he took over as sole manager of the fund in July 2005, Mr Thomson has returned 269pc to investors, compared with 131pc for his peer group. In the UK all companies sector, the duo of Anthony Cross and Julian Fosh, managers of Liontrust Special Situations, sit at the top of the pile, despite having only eight years of experience. They rank second across all managers in all sectors for the percentage of months in which they have delivered higher returns than their peers.
They are also in the top 10 for the average outperformance they delivered over other funds in their sector, beating managers that have far more experience.
Neil Woodford predictably tops the UK equity income sector, but is closely followed by Martin Cholwill of Royal London UK Equity Income, who has delivered better performance over the past five years. His fund charges 0.67pc a year, which is cheaper than Woodford Equity Income at 0.75pc.
In the Europe ex-UK sector star manager Richard Pease, of Crux Asset Management, sits in the number one spot, in part thanks to his 26 years’ experience. Alice Gaskell and Andreas Zoellinger, who run the £1.5bn BlackRock Continental European Income fund, delivered better performance over five years, but are ranked fifth in their sector because they have just over five years’ experience.
An impressive performer in the UK smaller companies sector is Paul Mumford from Cavendish Asset Management. He has delivered average monthly outperformance of 0.6 percentage points – beaten only by star manager Giles Hargreave of Hargreave Hale. Mr Mumford falls down slightly on the percentage of months in which he has beaten the sector.
The “other” category consists of Asian funds, from those focused on single countries to funds that cover the entire Asia Pacific region.
Dhananjay Phadnis sits in fourth place because he has only six years of experience in the sector. However, his career and five-year monthly average outperformance stats beat many of the managers above him. He also beat the Asia Pacific ex Japan sector in 65pc of months, joint second of all managers across all sectors. His main fund, Fidelity Emerging Asia, costs 1.08pc.
The UK all companies sector is the most heavily represented in the top 100, with 37 different managers or teams making the cut.
At the other end of the spectrum only two North America fund managers make the list. The US market is widely considered to be the most efficient globally, and therefore the hardest to beat.
SECTOR: GLOBAL Manager
Terry Smith Michael Lindsell Peter Saacke Douglas Brodie James Thomson
SECTOR: UK ALL COMPANIES Manager
Giles Hargreave Daniel Nickols James Thorne PaulMumford PaulMarriage Current fund Fundsmith Equity Lindsell Train Global Equity Artemis Global Growth Baillie Gifford Global Discovery Rathbone Global Opportunities Current fund Marlborough Special Situations OldMutual UK Smaller Cos Focus Threadneedle UK Smaller Cos Cavendish Aim Schroder UK Dynamic Smaller Cos
SECTOR: OTHER
Average monthly outperformance Full Past career 5 years
0.5pc 0.4pc 0.1pc 0.2pc 0.3pc
Average monthly outperformance Full Past career 5 years
0.5pc
Average monthly outperformance Full Past career 5 years
0.9pc 0.4pc 0.3pc 0.6pc 0.3pc
Average monthly outperformance Full Past career 5 years
0.3pc 0.5pc 0.3pc 0.2pc 0.3pc 0pc 0.4pc
Many ran funds through the crisis, so have navigated far more dramatic market turmoil
0.1pc 0.3pc 0.2pc 0.8pc 0.1pc 0.2pc