Equity houses survive style rotation in FundCalibre index

FundCalibre’s third annual Fund Management Equity Index found that, after several years dominated by a growth-centric investing style, value-oriented asset managers such as JOHCM and M&G returned to favour last year amid a gradual market rotation.

However, the ratings provider – which uses the report to identify groups with the most consistent record of outperformance over five years – noted that in spite of this shift, six groups had been a constant feature of the top 10 since the inaugural 2015 edition.

“Consistently good active management is not a myth,” said managing director Darius McDermott. “Six groups have been in our top 10 in the past three years, each in turn demonstrating outperformance over rolling five-year periods. This suggests a high degree of skill among their fund management teams.”

The asset managers in question – Stewart Investors, Old Mutual Global Investors, Baillie Gifford, SVM, T Rowe Price and Unicorn – span a range of geographies and approaches.

But it was River & Mercantile, which ranked fifth in the 2016 edition, that topped this year’s list, with all five of its eligible funds outperforming. The group achieved an average outperformance versus peers of 51.3 per cent over five years.

Stewart Investors, in second place, had a five-year average outperformance figure of 33.1 per cent, compared with 32 per cent for third-placed Unicorn.

Some asset managers experienced significant falls in the rankings, however. Liontrust, which made 11th place last year, sank to 46th position with a five-year average outperformance of 6.1 per cent and 44 per cent of its participating funds outperforming.

Aberdeen, the emerging market specialist which fared poorly in last year’s list, struggled again, falling to 75th place from its 2016 ranking of 63rd.

While some boutiques with relatively small fund ranges fared well, major firms were also among the better performers. “Some of the bigger global asset management companies have proven that they can produce the goods,” said Mr McDermott. “Eleven out of the top 20 companies have 10 or more funds.”

Schroders had 43 qualifying equity funds, with 88 per cent of these outperforming over the latest five-year timeframe.

Fidelity and Invesco Perpetual also did well with 38 and 29 qualifying funds respectively. Fidelity saw 74 per cent of its portfolios outperform, compared with 90 per cent for Invesco Perpetual.

Meanwhile, some firms designated “mid to large-sized” by FundCalibre – Artemis, JOHCM, Premier and Stewart Investors – saw all of their participating funds outperform. 

The firm looked at actively managed equity funds categorised by the Investment Association, with the performance of a company’s different offerings collated to calculate an average.

FundCalibre Fund Management Equity Index