Woodford tops list of fund managers with strongest track record
Tilney Bestinvest scrutinised 497 fund manager career track records, where a minium of five years data was available to rank the equity managers with the greatest success in beating the markets and for consistency of outperformance.
The wealth manager said scored managers on a number of factors including the average monthly excess performance over their market benchmark both over their full career history in a sector and also over the last five years.
“This twin performance filter was applied to recognise managers who have both performed well across their career and continued to do so in more recent times, as some fund managers can start out well but performance deteriorates as assets grow, they take on other responsibilities or burn out and lose their hunger for success,” the firm said.
The research stripped out charges and expenses levied, which can impact returns, so only the manager’s record was compared on a like-for-like basis.
Top ten equity fund managers:
- Neil Woodford, CF Woodford Equity Income fund, 0.30% outperformance
- Martin Cholwill of Royal London UK Equity Income, 0.21% outperformance
- Anthony Cross/Julian Fosh of Liontrust Special Situations, 0.51% outperformance
- Richard Pease, Crux European Special Situations, 0.43% outperformance
- Chris Hutchinson, Unicorn Outstanding British Companies, 0.48% outperformance
- Giles Hargreave, Marlborough Special Situations, 0.88% outperformance
- Mark Barnett, Invesco Perpetual High Income, 0.30% outperformance
- Stuart Parks, Invesco Perpetual Asian, 0.29% outperformance
- Daniel Nickols, Old Mutual UK Smaller Companies, 0.37% outperformance
- Nick Train, CF Lindsell Train UK Equity, 0.38% outperformance
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.”
He cautioned that 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.”