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
MANAGER | SECTOR | AVERAGE MONTHLY PERFORMANCE: FULL CAREER | AVERAGE MONTHLY PERFORMANCE:5 YEARS | % MTHS AHEAD OF INDEX | CURRENT FLAGSHIP FUND IN SECTOR |
Neil Woodford | UK EQUITY INCOME | 0.30% | 0.30% | 57% | CF Woodford Equity Income* |
Martin Cholwill | UK EQUITY INCOME | 0.21% | 0.46% | 58% | Royal London UK Equity Income |
Anthony Cross/Julian Fosh | UK ALL COMPANIES | 0.51% | 0.37% | 65% | Liontrust Special Situations* |
Richard Pease | EUROPE EXCLUDING UK | 0.43% | 0.29% | 56% | Crux European Special Situations |
Chris Hutchinson | UK ALL COMPANIES | 0.48% | 0.37% | 59% | Unicorn Outstanding British Companies |
Giles Hargreave | UK SMALLER COMPANIES | 0.88% | 0.08% | 61% | Marlborough Special Situations |
Mark Barnett | UK ALL COMPANIES | 0.30% | 0.37% | 58% | Invesco Perpetual High Income |
Stuart Parks | ASIA PACIFIC INCLUDING JAPAN | 0.29% | 0.20% | 61% | Invesco Perpetual Asian |
Daniel Nickols | UK SMALLER COMPANIES | 0.37% | 0.28% | 58% | Old Mutual UK Smaller Companies |
Nick Train | UK ALL COMPANIES | 0.38% | 0.64% | 57% | CF Lindsell Train UK Equity |
David Gait | ASIA PACIFIC EXCLUDING JAPAN | 0.41% | 0.51% | 57% | Stewart Investors Asia Pacific Leaders* |
Martin Lau | CHINA/GREATER CHINA | 0.62% | 0.10% | 59% | First State Greater China Growth |
Ben Whitmore | UK ALL COMPANIES | 0.31% | 0.27% | 58% | Jupiter UK Special Situations |
Martin Lau | ASIA PACIFIC EXCLUDING JAPAN | 0.38% | 0.33% | 57% | First State Asia Focus |
Thomas Moore | UK EQUITY INCOME | 0.37% | 0.38% | 67% | Standard Life UK Equity Income Unconstrained |
Mark Slater | UK ALL COMPANIES | 0.47% | 0.11% | 58% | MFM Slater Growth |
Dhananjay Phadnis | ASIA PACIFIC EXCLUDING JAPAN | 0.49% | 0.55% | 65% | Fidelity Emerging Asia |
James Thorne | UK SMALLER COMPANIES | 0.29% | 0.23% | 61% | Threadneedle UK Smaller Companies |
Alister Hibbert | EUROPE EXCLUDING UK | 0.37% | 0.34% | 56% | BlackRock European Dynamic |
Stephen Harker | JAPAN | 0.75% | 0.09% | 57% | MAN GLG Japan Core Alpha* |
Alex Savvides | UK ALL COMPANIES | 0.37% | 0.32% | 61% | JO Hambro UK Dynamic |
Jane Andrews | ASIA PACIFIC INCLUDING JAPAN | 0.32% | 0.13% | 58% | Smith & Williamson Far Eastern Income & Grth |
Majedie UK Focus Team | UK ALL COMPANIES | 0.34% | 0.33% | 57% | Majedie UK Focus |
Keith Ashworth-Lord | UK ALL COMPANIES | 0.60% | 0.64% | 60% | CFP SDL UK Buffetology |
Hideo Shiozumi | JAPAN | 0.69% | 1.08% | 51% | Legg Mason IF Japan Equity* |
Robert Marshall-Lee | GLOBAL EMERGING MARKETS | 0.49% | 0.46% | 60% | Newton Global Emerging Markets* |
Hugh Yarrow | UK ALL COMPANIES | 0.39% | 0.51% | 59% | Evenlode UK Income* |
Paul Mumford | UK SMALLER COMPANIES | 0.58% | 0.84% | 54% | Cavendish AIM |
Nicholas Williams | EUROPEAN SMALLER COS | 0.30% | 0.38% | 56% | Baring Europe Select* |
Margaret Lawson / Colin McLean | UK ALL COMPANIES | 0.28% | 0.33% | 60% | SVM UK Growth |
David Cumming | UK ALL COMPANIES | 0.54% | 0.59% | 56% | Standard Lf UK Equity Recovery |
Neil Veitch | UK ALL COMPANIES | 0.22% | 0.35% | 58% | SVM UK Opportunities |
Jeremy Lang / William Pattisson | UK EQUITY INCOME | 0.42% | 0.34% | 64% | Ardevora UK Income |
Terry Smith | GLOBAL | 0.48% | 0.46% | 58% | Fundsmith Equity* |
Paul Marriage | UK SMALLER COMPANIES | 0.32% | 0.14% | 58% | Schroder UK Dynamic Smaller Companies |
Aziz Hamzaogullari | NORTH AMERICA | 0.32% | 0.19% | 59% | Loomis Sayles US Equity Leaders |
John Wood | UK ALL COMPANIES | 0.28% | 0.28% | 56% | JO Hambro UK Opportunities |
Philip Dicken | EUROPEAN SMALLER COMPANIES | 0.35% | 0.12% | 61% | Threadneedle Pan European Smaller Cos |
Ciaran Mallon | UK ALL COMPANIES | 0.41% | 0.29% | 53% | Invesco Perpetual Income & Growth |
Alexander Darwall | EUROPE INCLUDING UK | 0.45% | 0.45% | 55% | Jupiter European Growth |
Anthony Cross / Julian Fosh | UK SMALLER COMPANIES | 0.48% | 0.50% | 56% | Liontrust UK Smaller Companies |
Franklin Focus Fund Team | UK ALL COMPANIES | 0.29% | 0.42% | 56% | Franklin UK Focus |
Audrey Ryan | UK ALL COMPANIES | 0.15% | 0.23% | 58% | Kames Ethical Equity |
Adrian Bignell | EUROPE EXCLUDING UK | 0.30% | 0.19% | 62% | Invesco Perpetual European Smaller Cos |
Harry Nimmo | UK SMALLER COMPANIES | 0.34% | 0.03% | 59% | Standard Life UK Smaller Companies |
Matt Hudson | UK EQUITY INCOME | 0.22% | 0.28% | 61% | Schroder UK Alpha Income |
Alexander Darwall | EUROPE EXCLUDING UK | 0.40% | 0.40% | 52% | Jupiter European* |
James Lowen / Clive Beagles | UK EQUITY INCOME | 0.32% | 0.24% | 58% | JO Hambro UK Equity Income |
Nigel Thomas | UK ALL COMPANIES | 0.45% | 0.11% | 54% | AXA Framlington UK Select Opportunities |
Chris Kinder | UK ALL COMPANIES | 0.27% | 0.35% | 64% | Threadneedle UK |
Source: Tilney Bestinvest