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Neil Woodford tops list of managers who add most value and consistency

Neil Woodford adds the most value and consistency, says Tilney Bestinvest
November 17, 2016

Wealth manager Tilney Bestinvest has compiled a list of the equity fund managers with the strongest career track records in adding value and consistency, and high-profile UK equity income manager Neil Woodford tops the list, which also features the managers of several other IC Top 100 Funds.

Mr Woodford, who runs CF Woodford Equity Income Fund (GB00BLRZQB71)*, has delivered an average monthly outperformance of 0.3 per cent over his career and during the past five years, and has generated an average monthly excess performance over his benchmark index 57 per cent of the time.

Martin Cholwill, manager of Royal London UK Equity Income (GB00B3M9JJ78), came second, having generated an average monthly outperformance of 0.21 per cent during his full career, and 0.46 per cent over the past five years.

Anthony Cross and Julian Fosh, managers of Liontrust Special Situations Fund (GB00B57H4F11)*, took third place with an average monthly outperformance of 0.51 per cent during the time they have been managing funds together and 0.37 per cent over the past five years.

Tilney Bestinvest analysed 497 fund manager track records where a minimum of five years' data was available. The managers were ranked on the average monthly excess performance they delivered above their market benchmark over their whole career history in a sector and also during the past five years. To measure the consistency of outperformance, the managers were also ranked on the percentage of individual months that they have delivered performance ahead of their benchmark during their career.

Jason Hollands, managing director at Tilney Bestinvest, said: "The dilemma for investors is that fund performance data is typically provided for a period of just five years, which is barely an economic cycle and in any case such data may be of very limited relevance if it relates to the tenure of a manager who is no longer at the helm. We therefore believe it is vital to assess the relevant, full career track record of the current manager in a sector, which may span multiple employers."

But although looking at a manager's career track record can be a useful starting point when picking a fund, investors need to think about other issues.

"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," said Mr Hollands.

Tilney Bestinvest's research stripped out the impact of fund costs to ensure each manager's record was comparable on a like-for-like basis and make it easier to assess whether a fund manager's investment decisions had added value. But costs are an important factor to keep in mind.

"[One of the] key factors that can affect returns on a fund are the charges and expenses levied, as these erode returns," said Mr Hollands. "You could have a fund manager who is very skilful at what they do, but if you drop them into a fund that has high charges that will deplete their performance."

He added that investors should also be cautious if a manager with a good track record in a particular sector starts managing money in a new area, or if they move to an investment firm with a very different working environment to the one in which they have been successful. Examples would include a manager moving from a large investment firm with lots of resources to a boutique with a much smaller team.

 

Top fund managers ranked by career track record

MANAGERSECTORAVERAGE MONTHLY PERFORMANCE: FULL CAREERAVERAGE MONTHLY PERFORMANCE:5 YEARS% MTHS AHEAD OF INDEXCURRENT FLAGSHIP FUND IN SECTOR
Neil WoodfordUK EQUITY INCOME0.30%0.30%57%CF Woodford Equity Income*
Martin CholwillUK EQUITY INCOME0.21%0.46%58%Royal London UK Equity Income
Anthony Cross/Julian FoshUK ALL COMPANIES0.51%0.37%65%Liontrust Special Situations*
Richard PeaseEUROPE EXCLUDING UK0.43%0.29%56%Crux European Special Situations
Chris HutchinsonUK ALL COMPANIES0.48%0.37%59%Unicorn Outstanding British Companies
Giles HargreaveUK SMALLER COMPANIES0.88%0.08%61%Marlborough Special Situations
Mark BarnettUK ALL COMPANIES0.30%0.37%58%Invesco Perpetual High Income
Stuart ParksASIA PACIFIC INCLUDING JAPAN0.29%0.20%61%Invesco Perpetual Asian
Daniel NickolsUK SMALLER COMPANIES0.37%0.28%58%Old Mutual UK Smaller Companies
Nick TrainUK ALL COMPANIES0.38%0.64%57%CF Lindsell Train UK Equity
David GaitASIA PACIFIC EXCLUDING JAPAN0.41%0.51%57%Stewart Investors Asia Pacific Leaders*
Martin LauCHINA/GREATER CHINA0.62%0.10%59%First State Greater China Growth
Ben WhitmoreUK ALL COMPANIES0.31%0.27%58%Jupiter UK Special Situations
Martin LauASIA PACIFIC EXCLUDING JAPAN0.38%0.33%57%First State Asia Focus
Thomas MooreUK EQUITY INCOME0.37%0.38%67%Standard Life UK Equity Income Unconstrained
Mark SlaterUK ALL COMPANIES0.47%0.11%58%MFM Slater Growth
Dhananjay PhadnisASIA PACIFIC EXCLUDING JAPAN0.49%0.55%65%Fidelity Emerging Asia
James ThorneUK SMALLER COMPANIES0.29%0.23%61%Threadneedle UK Smaller Companies
Alister HibbertEUROPE EXCLUDING UK0.37%0.34%56%BlackRock European Dynamic
Stephen HarkerJAPAN0.75%0.09%57%MAN GLG Japan Core Alpha*
Alex SavvidesUK ALL COMPANIES0.37%0.32%61%JO Hambro UK Dynamic
Jane AndrewsASIA PACIFIC INCLUDING JAPAN0.32%0.13%58%Smith & Williamson Far Eastern Income & Grth
Majedie UK Focus TeamUK ALL COMPANIES0.34%0.33%57%Majedie UK Focus
Keith Ashworth-LordUK ALL COMPANIES0.60%0.64%60%CFP SDL UK Buffetology
Hideo ShiozumiJAPAN0.69%1.08%51%Legg Mason IF Japan Equity*
Robert Marshall-LeeGLOBAL EMERGING MARKETS0.49%0.46%60%Newton Global Emerging Markets*
Hugh YarrowUK ALL COMPANIES0.39%0.51%59%Evenlode UK Income*
Paul MumfordUK SMALLER COMPANIES0.58%0.84%54%Cavendish AIM
Nicholas WilliamsEUROPEAN SMALLER COS0.30%0.38%56%Baring Europe Select*
Margaret Lawson / Colin McLeanUK ALL COMPANIES0.28%0.33%60%SVM UK Growth
David CummingUK ALL COMPANIES0.54%0.59%56%Standard Lf UK Equity Recovery
Neil VeitchUK ALL COMPANIES0.22%0.35%58%SVM UK Opportunities
Jeremy Lang / William PattissonUK EQUITY INCOME0.42%0.34%64%Ardevora UK Income
Terry SmithGLOBAL0.48%0.46%58%Fundsmith Equity*
Paul MarriageUK SMALLER COMPANIES0.32%0.14%58%Schroder UK Dynamic Smaller Companies
Aziz HamzaogullariNORTH AMERICA0.32%0.19%59%Loomis Sayles US Equity Leaders
John WoodUK ALL COMPANIES0.28%0.28%56%JO Hambro UK Opportunities
Philip DickenEUROPEAN SMALLER COMPANIES0.35%0.12%61%Threadneedle Pan European Smaller Cos
Ciaran MallonUK ALL COMPANIES0.41%0.29%53%Invesco Perpetual Income & Growth
Alexander DarwallEUROPE INCLUDING UK0.45%0.45%55%Jupiter European Growth
Anthony Cross / Julian FoshUK SMALLER COMPANIES0.48%0.50%56%Liontrust UK Smaller Companies
Franklin Focus Fund TeamUK ALL COMPANIES0.29%0.42%56%Franklin UK Focus
Audrey RyanUK ALL COMPANIES0.15%0.23%58%Kames Ethical Equity
Adrian BignellEUROPE EXCLUDING UK0.30%0.19%62%Invesco Perpetual European Smaller Cos
Harry NimmoUK SMALLER COMPANIES0.34%0.03%59%Standard Life UK Smaller Companies
Matt HudsonUK EQUITY INCOME0.22%0.28%61%Schroder UK Alpha Income
Alexander DarwallEUROPE EXCLUDING UK0.40%0.40%52%Jupiter European*
James Lowen / Clive BeaglesUK EQUITY INCOME0.32%0.24%58%JO Hambro UK Equity Income
Nigel ThomasUK ALL COMPANIES0.45%0.11%54%AXA Framlington UK Select Opportunities
Chris KinderUK ALL COMPANIES0.27%0.35%64%Threadneedle UK

Source: Tilney Bestinvest

*IC Top 100 Fund.