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The most consistent investment fund management firms

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Written by:
10/02/2021
Baillie Gifford has been named the top performing fund management firm in the latest Fund Management Equity Index from FundCalibre.

FundCalibre assesses fund houses each year to pick out which asset management firms have the most consistently strong stock-picking teams, with Baillie Gifford knocking three-times winner Morgan Stanley into second space.

The index looks at all actively managed equity funds recognised by the Investment Association, and tracks how they performed against their sector averages over the prior five years.

Here’s how the top ten shape up according to Fund Calibre: 

Rank 2021 Rank 2020 Fund Group 5 yr ave. outperformance % of funds outperforming Average OCF No. of Funds
1 2 Baillie Gifford 82.16% 94% 0.62% 16
2 1 Morgan Stanley 73.00% 100% 0.91% 4
3 7 Comgest 36.68% 75% 0.95% 4
4 5 T. Rowe Price 31.39% 75% 0.92% 16
5 New FSSA 26.44% 75% 1.09% 4
6 4 Wellington 23.05% 80% 1.04% 5
7 35 Matthews Asia 22.32% 67% 1.29% 9
8 38 JP Morgan 18.77% 65% 0.81% 20
9 26 & 57 Premier Miton 18.67% 64% 0.92% 11
10 25 Legg Mason Martin Currie 16.69% 60% 1.07% 5

 

Baillie Gifford has been an ever-present in the top 10 over the past seven years, but has taken top spot thanks to a barnstorming year in which 15 of its 16 eligible funds outperformed their various sector averages.

A big factor in its success was the performance of Baillie Gifford American, which was the top fund of the year, returning a whopping 121.84%. That’s a massive 105.67% more than its average rival. Notably another four funds from their firm beat their sector average by at least 50%.

FundCalibre also pointed to the consistency of T. Rowe Price, which has made the top 10 each year, which is perhaps even more impressive given the number of active funds it has on the go. FundCalibre said that maintaining that level of consistency across so many funds was “extremely impressive”.

The importance of charges

FundCalibre also pointed to the issue of charges as a factor in Baillie Gifford’s presence at the top of the table, as it has the cheapest average ongoing charge of all the companies, to the point that some of its funds are even cheaper than passive funds.

The report added: “Charges matter as they compound over time. So having a lower charge really helps performance as well as demonstrating a really good attitude of putting the client first. This can run right through the culture of the firm into the stock picking and shows in the performance numbers.”

The index also highlights the importance of doing your research before investing, given there is such a monumental difference in performance between the best and worst fund groups.

The report noted: “The average outperformance of top group, Baillie Gifford’s funds, was almost 100% higher than that of the bottom group, Sanlam. So good fund research is key to maximising the potential of your investment portfolio.”

However it’s not always easy to get the information you need out of an investment firm. A study by CFA UK last week suggested that the ‘assessment of value’ reports investment firms are now required to put together for their funds are all too often not up to scratch, with all sorts of vital information left out or hard to find. 

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