As with last year, so with this: the 2019 Fund House of the Year survey is again a tale of relatively positive conditions for risk assets, punctuated by a period in which sentiment slumped significantly.
The steep falls in equity markets recorded in late 2018 were not enough to prevent funds in our survey from producing a positive return – the rebound seen in 2019 has guaranteed that. But they did ensure that those asset managers topping our study of consistent fund houses had to work hard to earn their corn.
This year we have returned to the survey’s traditional performance period: the 12 months to the end of April. Using FE data for the year to May 1 2019, we have identified the best asset managers by their funds’ average return on £1,000, and those same funds’ average sector ranking against peers.
We make these assessments using companies’ entire retail fund range – with some caveats. To be eligible for inclusion, funds must be suitable for advisers, meaning those whose name specifies an institutional mandate have again been excluded. So too have money market funds.
In keeping with previous years, single-asset passive funds were also left out. But multi-asset passive portfolios have been included once more, again on the basis that asset allocation is a core skill for fund managers.
Similarly, we continue to split the results by fund manager size. That means three different grades of asset manager – large, medium and small – based on the number of eligible funds they offer.
The change made last year, which allowed for greater competition in the large firm category by lowering the entry threshold, has been retained in 2019. Therefore, fund firms with 35 or more eligible products again qualify for this segment, and a medium-sized fund house is defined as one with between 10 and 34 relevant strategies. Small groups remain those with fewer than 10.
The fund universe used for the survey is the Investment Association sectors – portfolios are classified according to the IA groupings, and those funds that sit outside the sectors are ineligible.
But as ever, even two firms of a similar size may not be directly comparable, particularly at the lower end of the scale. The performance of a boutique running US equity portfolios is clearly not comparable with that of a fixed income specialist.
Hence we also show the biggest standouts on an asset-class basis, as highlighted in Table 3, to illustrate which firms have flourished in a particular area of the market. Equally, our findings should not be treated as an investment recommendation – but rather as a guide to the past year’s successes.
Top of the pile
The large fund house that proved most adept at navigating the topsy-turvy markets of 2018-19 is Fidelity. It ends JPMorgan Asset Management’s two-year reign at the top of Table 1, and notably also tops Table 2’s list of the best fund groups by sector decile.
That’s the first time this has happened since 2016, when BNY Mellon topped both rankings. The only other time that a fund group has led both rankings was the year before that, in 2015, when Fidelity again headed both piles.