EquityNov 16 2016

Top equity fund managers revealed

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Top equity fund managers revealed

Neil Woodford is the equity manager with the best track record of adding value consistently, according to research by Tilney Bestinvest.

The research looked at the track records of 497 fund managers across a range of equity sectors where at least five years of data was available.

Mr Woodford, manager of the CF Woodford Equity Income fund, outperformed his benchmark by 0.3 per cent on average both over his career and over the past five years.

He also spent 57 per cent of months over his career ahead of his benchmark.

In second place was Martin Cholwill, manager of the Royal London UK Equity Income fund, who delivered higher outperformance over the past five years, at 0.46 per cent, but lower over his career at 0.21 per cent.

Meanwhile Liontrust duo Anthony Cross and Julian Fosh, managers of Liontrust Special Situations, came third.

Over their career they managed 0.51 per cent average outperformance and 0.37 per cent over the past five years.

The differences in return between the best and worst performing actively managed funds is enormous and simply cannot be explained by variations in fund costs but rather are the result of the investment decisions madeJason Hollands

Jason Hollands, managing director of Tilney Bestinvest, said: “The differences in return between the best and worst performing actively managed funds is enormous and simply cannot be explained by variations in fund costs but rather are the result of the investment decisions made.

“If you are going to invest with actively managed funds it is therefore vital to select the right managers and to always reassess the case for continuing to hold a fund when the manager or team changes as they inevitably do in a highly competitive industry.

“The dilemma for investors is that fund performance data is typically provided for a period of just five years, which is barely an economic cycle and in any case such data may be of very limited relevance if it relates to the tenure of a manager who is no longer at the helm.

“We therefore believe it is vital to assess the relevant, full career track record of the current manager in a sector which may span multiple employers.”

 

 

 

AVG MTHLY OUTPERFORMANCE

CONSISTENCY

EXPERIENCE

 

 

MANAGER

SECTOR

FULL CAREER

5 YEARS

% MTHS AHEAD

IN SECTOR

CURRENT FLAGSHIP FUND IN SECTOR

1

Neil Woodford

UK EQUITY INCOME

0.30%

0.30%

57%

27.9

CF Woodford Equity Income

2

Martin Cholwill

UK EQUITY INCOME

0.21%

0.46%

58%

19.4

Royal London UK Equity Income

3

Anthony Cross / Julian Fosh

UK ALL COMPANIES

0.51%

0.37%

65%

8.3

Liontrust Special Situations

4

Richard Pease

EUROPE EXCLUDING UK

0.43%

0.29%

56%

26.3

Crux European Special Situations

5

Chris Hutchinson

UK ALL COMPANIES

0.48%

0.37%

59%

9.8

Unicorn Outstanding British Companies

6

Giles Hargreave

UK SMALLER COMPANIES

0.88%

0.08%

61%

18.2

Marlborough Special Situations

7

Mark Barnett

UK ALL COMPANIES

0.30%

0.37%

58%

13.7

Invesco Perpetual High Income

8

Stuart Parks

ASIA PACIFIC INCLUDING JAPAN

0.29%

0.20%

61%

16.7

Invesco Perpetual Asian

9

Daniel Nickols

UK SMALLER COMPANIES

0.37%

0.28%

58%

14.2

Old Mutual UK Smaller Companies

10

Nick Train

UK ALL COMPANIES

0.38%

0.64%

57%

11.8

CF Lindsell Train UK Equity

Managers were scored on a number of factors, including their average monthly excess performance over their benchmark both over their full career and a five-year period.

They were also ranked on the percentage of individual months they delivered performance ahead of their benchmark during their career to measure consistency.

A final ranking was applied based on the length of a manager’s track record as the more data on the basis that more data made the conclusions more reliable.

Mr Hollands said: “While analysing a manager’s historic track record is important, choosing a fund based solely on past performance is as inadvisable as driving a car staring into the rear view mirror alone.

“In considering a manager’s future prospects there are other factors to consider, such as whether they are running too much money and if capacity could impact their investment style as well as an assessment of whether the fund they are now managing has an attractive structure and reasonable costs.

“We therefore see this type of past performance analysis as a useful starting point rather than a complete formula for picking a fund.”

Tilney Bestinvest stripped out the impact of costs so that each manager’s record was comparable on a like-for-like basis.

Where a manager has run multiple funds within the same sector at the same time, a blended track record across the funds was used.

Darren Cooke, a chartered financial planner with Derbyshire-based Red Circle Financial Planning, said: "Woodford has unsurprisingly come out on top but if you look at his performance over the past 12 months it has hardly been stunning.

"If you compared them to the stock market as opposed to a manager benchmark you might get a different result. Trying to pick which managers are going to perform over the next 12 months or five years is all but impossible."