The champions who set the long-term pace - Bestinvest names the fund managers who beat the market in both good and bad times19 April 2013
Consistency is a precious attribute when it comes to investing, with many funds delivering erratic returns comprised of spurts of strong outperformance interspersed with periods in the wilderness -and this can distort the ranking of funds over the three or five year periods which many investors focus on.
In some cases the oscillating fortunes of a fund manager can reflect a particular management style-bias being in tune or out of step with factors driving the markets at different points in time, but it also suggests luck rather than skill may be behind past returns. To help investors, Bestinvest, a leading research-driven adviser, has identified the fund managers who have demonstrated the ability to beat the market most of the time and in different market environments.
Using the firm’s proprietary research database of fund manager career records, Bestinvest’s research team have analysed the records of 220 fund managers and teams with at least 10-years identifiable history of managing investment funds. These were then filtered down to find 61 managers, just 28% of the initial universe, who have managed to outperform the index which they are benchmarked against in both the majority of months when markets rose and also those when markets declined. This approach has enabled Bestinvest to hone in on those fund managers who have demonstrated not just their ability to deliver regular outperformance but also to adapt to different market climates.
Bestinvest has filtered this elite group based on the firm’s Manager Record Index, a statistical measure developed by the firm to assess the probability of a fund manager’s track record being a result of skill rather than luck. According to this the top fifteen consistent, long-term outperformers are:
|Manager||Sector||Current Fund(s) in Sector||Career Manager Record Index (MRI) score||Career outperformance vs. underperformance*||% of time manager has outperformed in falling markets*||% of time manager has outperformed in rising markets*|
|1||Georgina Brittain||UK SMALLER COMPANIES||JPM UK Smaller Companies||99.8||66%||68%||64%|
|2||Giles Hargreave||UK SMALLER COMPANIES||Marlborough Special Situations & Marlborough UK Micro Cap||100.0||63%||72%||57%|
|3||Stuart Parks||ASIA PACIFIC INCLUDING JAPAN||Invesco Perpetual Pacific||99.9||62%||62%||62%|
|4||Harry Nimmo||UK SMALLER COMPANIES||Standard Life UK Smaller Companies||99.5||60%||66%||55%|
|5||Stephen Harker||JAPAN||GLG Japan Core Alpha||100.0||60%||62%||57%|
|6||Tom Dobell||UK ALL COMPANIES||M&G Recovery||99.5||57%||59%||56%|
|7||Jane Andrews||ASIA PACIFIC INCLUDING JAPAN||Smith & Williams Far Eastern Growth||99.4||57%||55%||59%|
|8||Julie Dean||UK ALL COMPANIES||Cazenove UK Opportunities & The Capital Trust||99.9||57%||58%||56%|
|9||Richard Pease||EUROPE EXCLUDING UK||Henderson European Growth & Henderson European Special Situations||100.0||57%||64%||51%|
|10||Mark Slater||UK ALL COMPANIES||MFM Slater Recovery / MF Slater Growth / MF Bowland Fund||98.8||56%||66%||50%|
|11||Simon Somerville||JAPAN||Jupiter Japan Income||99.2||55%||59%||52%|
|12||Derek Stuart||UK ALL COMPANIES||Artemis UK Special Situations||99.2||55%||57%||53%|
|13||Nathan Gibbs||JAPAN||Schroder Japan Alpha Plus||97.3||54%||56%||53%|
|14||Austin Forey||GLOBAL EMERGING MARKETS||JPM Emerging Markets||96.9||54%||56%||53%|
|15||Chisako Hardie||JAPANESE SMALLER COMPANIES||AXA Framlington Japanese Smaller Companies||77.9||51%||50%||52%|
*Based on months
Jason Hollands, Managing Director of Business Development & Communications at Bestinvest, said:
“Investing in funds is a marathon not a short-term sprint so it pays to focus on the records of those individuals and teams who have demonstrated the stamina to regularly outperform over the long-term. The challenge for most investors is that it is not easy to scrutinise career track records without access to quality research and most publicly available data is at the fund rather than manager level, typically for periods of no longer than five years.
“The challenge is exacerbated by the fact that fund management is an incredibly competitive industry and managers periodically change jobs. If you are going to invest in actively managed funds, your need for rigorous research does not stop at the point of purchase. Whether you take advice or invest on ‘DIY’ basis, it is vital to monitor your portfolio carefully lest you need to respond to changes in management. This is a pivotal part of the value Bestinvest seeks to provide to our clients.”
For access to Bestinvest’s tools for analysing manager career records, including Manager Record Index (MRI) scores, monthly up/down ratios, career performance charts and CVs please visit www.bestinvest.co.uk/research
- ENDS -
Funds will have varying risks depending on the geographical area and/or industry sector in which they invest, and you should ensure you understand these risks before you invest. The value of investments can go down as well as up, and you may get back less than you originally invested. This article is not a personal recommendation, or advice to invest.
Founded in 1986, Bestinvest was a pioneer of helping clients reduce the costs of investing through discounting commissions. Today Bestinvest has grown into a leading private client adviser which helps over 50,000 investors. Bestinvest offers a range of services including guidance, investment advice, financial planning and discretionary portfolio management all of which are underpinned by a commitment to rigorous investment research. Through its low cost Select service, Bestinvest offers execution-only investors a Self-Invested Personal Pension Plan (SIPP), Individual Savings Account (ISA), Junior ISA (JISA) and Investment Account with access to more than 2,000 funds as well as investment trusts, shares and Exchange Traded Funds. Bestinvest has won numerous awards including ‘Self-Select ISA Provider of the Year 2011’ and ‘UK Wealth Manager of the Year 2011’ as voted by readers of the Investors Chronicle and Financial Times and Investment Adviser of the Year 2012 at the Professional Adviser Awards. Headquartered in Mayfair, London, Bestinvest has 14 regional offices with 200 staff servicing clients with over £4 billion of assets.
Tilney is a leading investment and financial planning group that builds on a heritage of more than 180 years. Our clients are private investors, charities and professional intermediaries who trust us with over £23 billion of their assets. We offer a range of services including financial planning, investment management and advice and, through our Bestinvest service, a leading online platform for those who prefer to manage their own investments.
We have won numerous awards. Tilney has been awarded Best Conventional Advisory Service at the 2018 City of London Wealth Management Awards, Best Advisory Service in the 2015 City of London Wealth Management Awards; Investment Award – Cautious category in the Private Asset Management Awards; and Stockbroker of the Year, Execution-only Stockbroker of the Year and Self-select ISA Provider of the Year 2015, as voted by readers of the Financial Times and Investors Chronicle. Bestinvest was voted Best SIPP Provider and Best Fund Platform at the 2017 City of London Wealth Management Awards, Best Direct SIPP Provider at the YourMoney.com Awards 2017, Best Stocks & Shares ISA Provider at the 2017 Shares Awards, as well as Best Self Select ISA Provider, Best Online/Execution-only Stockbroker and Best Investment Platform 2017 at the FT and Investors Chronicle Investment and Wealth Management Awards, as voted by readers of the FT and Investors Chronicle.
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