Picking the right fund for your portfolio out of the thousands available can be a tricky job. Selecting a fund group to look at can be just one way to start. Following on from last year, we decided to find out which were the best returning fund groups for the past 12 months to become Money Management’s Fund House of the Year.
Using data from FE, funds selected must be retail funds (all institutional funds have been excluded from the process) with a minimum investment of £10,000 or below. Funds were organised by group and then by space. These spaces are those classified by the Investment Association (IA) to calculate average returns.
Our rankings are based on the average return for all funds from each group and, they are by no means scientific, nor should they be construed as a recommendation or advice on how you should pick the right funds for your clients, it is purely hypothetical. All tables should be looked at with a caveat in mind that each group specialises in different areas so they cannot be directly comparable. One group may specialise in fixed income funds while another focuses on equities. Performance cannot be compared directly as they have completely different market cycles. A group which may be outperforming within fixed income could still technically underperform compared with an underperforming equity specialist.
Research such as this can easily turn out to be biased towards smaller companies, as it is easier to maintain a strong average performance across a small selection of funds. In order to avoid this, we have separated results into small, mid and large sized companies, however this is not by market cap, but purely by the number of funds available, to make the comparison simpler.
As with last year’s research, small groups are those that have between one and nine funds available to UK retail investors, medium sized groups have between 10 and 39, and large groups are those with more than 40 funds available.
Jumping up the table
Henderson is one large group that has jumped up the results (as seen in Table 1) – last year it failed to make the top five, but was ninth among the large groups when it came to the average sector decile. This year, Henderson is placed fifth of the large groups by average performance and sector decile, a stark increase on the past few years. In 2011, specifically, the group saw large outflows due to the acquisitions of New Star in 2009 and Gartmore in 2011. It struggled for a few years, but net inflows for 2014 saw a 184 per cent increase on 2013.
