Some 200 fund managers have been crowned “alpha managers” in this year’s round up of the best in the business, with Wellington Management’s John Boselli topping the list.
The ratings, announced today (February 19) by data and technology provider FE Fundinfo, compile the top 10 per cent of UK retail fund managers based on their entire career performance.
FE looks at the manager’s ability to create risk-adjusted alpha (the returns made above the benchmark that can be attributed to the manager’s skill), outperformance in rising and falling markets, and a consistent ability to beat the benchmark.
New entrant John Boselli, senior managing director and equity portfolio manager at Wellington Management, topped the list for his management of the firm’s global, non-US developed market and European quality-growth portfolios.
Among the other new managers to join the list were Alex Lyle from Threadneedle, who manages 13 funds, and Philip Saunders from Investec, who runs nine funds across the IA Flexible and Specialist Sectors.
A hefty 55 managers lost their alpha status this year, with retirement, fund closure and underperformance being the main causes.
Chief among those losing the crown was Neil Woodford, whose flagship equity income fund was suspended and subsequently closed in 2019 following an extended period of underperformance and redemptions.
In terms of fund groups, Fidelity topped the table with 11 alpha managers to its name. They replaced BlackRock who dropped to second with eight managers on the list.
Other major fund groups saw a number of their managers being awarded the alpha badge, including Comgest Asset Management, Polar Capital and GAM.
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Jason Hollands, managing director of communications at Tilney, said: “It’s not surprising that very large groups like Fidelity and BlackRock have a number of managers identified as having strong historic track records. It’s a numbers game.
“The impressive story here is Polar Capital — a fairly small business with a multi-boutique model that essentially comprises a federation of autonomous investment teams.”
Alistair Fullerton, director at Lathe Wealth & Co, said the fact there were managers with multiple funds in the top 10 per cent gave an interesting insight into the production of alpha.
He said: “A ‘star’ manager can sometimes be misinterpreted as seeing the world in a different way to others – the crystal ball effect. From our experience with our investment consultants, there are multiple softer factors that can nurture alpha.”
Across the sectors, the 2020 ratings revealed a strong year for global markets. The IA Global Sector saw 39 of its managers receive the accolade, compared with 33 in the IA UK All Companies Sector and 26 in the IA Specialist group.
Charles Younes, research manager at FE Fundinfo, said: “US equities have consistently outperformed other asset classes, despite their rich valuation.
“While they are expensive, those managers that look beyond valuation and concentrate on other factors have enjoyed positive performances, and we have seen a high number of alpha managers operating within the IA Global Sector.”