Funds with a consistent track record of superior performance
Do you fancy discovering the high-fliers in the open-ended funds space? We’ve analysed the data to find the funds which have consistently appeared at the top of the performance tables.
Past performance is no guide to future returns, and lest we forget, we’ve been in a bull market for over a decade, which has provided a tailwind for most portfolios. Yet those funds and managers that have routinely outperformed during the economic and market vagaries of the past decade must be doing something right.
To be included in our high-fliers list, funds must have delivered top quartile performance in each of the one, two, three, four, five and 10 year periods to 29 January 2020 without exception.
From Investment Association’s (IA) universe of 4,045 unit trusts and OEICs, our search criteria is only met by 122 funds, a mere 3% of the total. We’ll now look at a selection of these products split by fund sector.
UK ALL COMPANIES SECTOR
Bestriding the IA UK All Companies sector like a colossus is Slater Growth (B7T0G90), a unit trust which has delivered a stunning 361.5% return on a 10-year view under its consistent manager Mark Slater.
Son of the late Jim Slater, the famous financier and investor who penned influential stock picking tome The Zulu Principle, Mark Slater adopts the same principles outlined in his father’s book, unearthing growth companies using value filters and with the price-to-earnings growth or ‘PEG’ ratio providing a starting point.
The sector’s other super-consistent collectives delivering on a decade-long time frame include Franklin UK Mid Cap (B7BXT54), Royal London UK Mid-Cap Growth (B5BRW42), as well as the highly successful TB Evenlode Income (BD0B7C4).
The latter fund has an emphasis on sustainable real dividend growth which has seen the portfolio filled with companies such as Unilever (ULVR), RELX (REL) and GlaxoSmithKline (GSK), large cap companies generating high returns-on-capital and strong free cash flow.
The US stock market has spearheaded the prolonged bull-run, with its large technology leaders rampaging higher, so you’d expect to see some strong showings from within the IA North America sector. Baillie Gifford American’s (0606196) stellar 10, five and three-year returns – of 469.9%, 174.9% and 81.1% respectively, according to Fe Fundinfo – certainly merit mention.
Managed by Gary Robinson and Helen Xiong, who back their judgment by running a concentrated portfolio of 30 to 50 growth businesses, the top 10 includes online shopping-to-web services star Amazon, electric car maker Tesla, Google’s parent company Alphabet and online furniture seller Wayfair.
Close inspection of the IA Global sector reveals an intriguing trio of top performers, headed up by Seilern World Growth (B2NXKV0). This £1.1bn fund seeks to achieve absolute returns with moderate risk by investing in OECD country companies of highest quality with proven track records. This strategy has served the fund well, as demonstrated by its 346% 10-year return.
Hot on its heels are Morgan Stanley Global Brands (3248249) with a 306.4% 10-year return, and also Pictet Security (B5169S2), an investor in companies which provide safety and security products and services including Equinix, Thermo Fisher Scientific and Palo Alto Networks, with a 301.9% return this past decade.
OTHER TOP PERFORMERS
Fe Fundinfo data throws up other portfolios that have produced terrific returns year in, year out. For example, one utilises a proven process with a team approach and another taps into the expertise of a long-serving lead manager.
Among this group is Liontrust UK Smaller Companies (B57TMD1), a fund which has delivered by daring to be different. The last factsheet cites 97.1% active share, a measure of how different a fund’s holdings are to its benchmark, and investors in this fund from the Liontrust stable are 434.5% in the money on a 10-year view.
Managers Anthony Cross, Julian Fosh, Matt Tonge and Victoria Stevens use Liontrust’s tried-and-tested ‘Economic Advantage’ process to spot companies with a durable competitive advantage that not only allows them to defy industry competition, but to also sustain a higher than average level of profitability for longer than expected.
Another fund in the top performers list is T. Rowe Price US Blue Chip Equity (BJT34X3), whose manager Larry J. Puglia puts money to work with large and medium-sized blue chip companies quoted across the pond.
Top 10 holdings span Amazon and Alphabet to payments plays Visa and Mastercard, although the fund also owns Boeing, the aircraft maker that has recently encountered much turbulence.