Join our community of smart investors

IC Top 100 Fund managers ranked among the best

Tilney Bestinvest's top manager list has several correlations with ours
December 9, 2015

Wealth manager Tilney Bestinvest has published a list of its top 100 fund managers based on managers' performance records across their entire careers. The list includes 20 managers or teams who run IC Top 100 Funds, including four in the top 10.

In top place is Angus Tulloch who runs the Stewart Investors Asia Pacific Leaders Fund* (GB0033874768). Tilney Bestinvest says Mr Tulloch is a very cautious manager and this has helped him weather the recent stormy Asian markets far better than the competition. He is, however, stepping back from the management of his funds and will hand over Stewart Investors Asia Pacific Leaders to David Gait by July 2016.

While investors are often focused on an individual fund's returns, the track record of the manager is very important, and this can't always be assessed by that fund's numbers - for example, if the current manager has only just started running it.

Tilney Bestinvest says Mr Gait is a worthy successor as he is ranked at number 15 in the list for managing Asian equities, and at 25 for managing global emerging markets equities. Mr Gait runs another of our IC Top 100 Funds - Pacific Assets Trust * (PAC) - where he has also built up a strong record.

Giles Hargreave is ranked at number two and has managed his flagship fund, Marlborough Special Situations (GB00B907GH23), since 1998, over which period a £100 investment would now be worth £2,289.48. His smaller companies track record also reflects his performance with Marlborough UK Micro-Cap Growth* (GB00B8F8YX59) and Marlborough Nano-Cap Growth (GB00BF2ZV048), which focus on minnow-sized companies. His approach involves meeting a huge number of companies and investing a modest amount of each fund in a large number of companies. Marlborough Special Situations, for example, has around 200 investments.

Neil Woodford, arguably the highest profile manager in the UK, comes in at number four. He joined Invesco Perpetual in 1988 where over the next 26 years he built up an outstanding record running Invesco Perpetual Income (GB00BJ04HX60) and High Income (GB00BJ04HQ93). He left last year to set up Woodford Investment Management where he has launched CF Woodford Equity Income* (GB00BLRZQ737) and Woodford Patient Capital Trust (WPCT).

Mr Woodford has a long-term approach mostly favouring companies with defensive characteristics, and has large positions in tobacco and healthcare.

In fifth position is Neil Woodford's successor at Invesco Perpetual, Mark Barnett. He has made good returns with Invesco Perpetual Income and High Income since taking them over, before which he built a strong record with Invesco Perpetual UK Strategic Income Fund (GB00BJ04KZ97). He also has a strong record on Perpetual Income and Growth Investment Trust* (PLI).

Other managers running IC Top 100 Funds on Tilney Bestinvest's list include Anthony Cross and Julian Fosh, who run Liontrust Special Situations* (GB00B57H4F11) at number 16; Stephen Harker, Neil Edwards and Jeffrey Atherton who run Man GLG Japan Core Alpha* (GB00B0119C67) at number 18; Carl Stick, who runs Rathbone Income* (GB00B3Q9WG18) at 19; and Nick Train who runs Finsbury Growth and Income Trust* (FGT) and Lindsell Train Global Equity Fund* (IE00B3NS4D25) at 26.

*IC Top 100 Fund

 

Tilney Bestinvest top 10 fund managers

RankManagerSector Years in sectorAverage monthly outperformance over career (%)Percentage of months outperformed over career (%)
1Angus TullochAsia Pacific ex Japan27.20.4957
2Giles HargreaveUK Smaller Companies17.20.9162
3Mark SlaterUK All Companies20.20.5158
4Neil WoodfordUK Equity Income26.90.3458
5Mark BarnettUK All Companies12.70.3559
6Alex WrightUK Smaller Companies7.50.7466
7Andy Brough/Rosemary BanyardUK Smaller Companies17.80.4159
8Thomas MooreUK Equity Income6.70.5770
9Paul MarriageUK Smaller Companies12.30.3359
10Chris HutchinsonUK All Companies8.80.558

Source: Tilney Bestinvest.

 

Methodology

The report looks at manager track records across their entire career, built up running unit trusts or open-ended investment companies (Oeics) that invest in equities and are available to UK private investors. It only counts managers with track records in a specific sector of at least five years to strip out those who have had a short run of good or bad luck.

Costs have also been stripped out so managers can be compared on a like-for-like basis.

Managers were then scored on:

■ Performance versus a relevant benchmark index, joining up the records where they have worked at more than one firm, and blending the records where they have managed more than one fund at the same time.

■ Consistency: the percentage of months each manager has beaten their benchmark index, because some impressive long-term records are due to small spurts of significant performance which could suggest lucky breaks rather than ability.

The methodology also stipulates that the manager must have delivered positive absolute returns over the past five years.

A half weighting also goes to the length of the manager's record in the sector.

 

Look to the future

Past performance is a useful starting point for identifying managers with genuine skill, but investors should also consider:

■ Is the manager about to retire?

■ Did they build up their historic record when the fund was much smaller, and is the process repeatable now? Is the manager still investing in the same sort of companies?

■ If the fund they are running today has high charges or a performance fee could this eat into future performance?

■ Has the manager changed the way they run money?

■ How well-resourced are they? For example, if they built up the record at a past employer and were backed by a large team of analysts, do they still have this support or can they manage without it?