Most consistent funds of the decade: UK All Companies
The sector has the highest number of funds to achieve top-quartile performance between September 2002 and 2007 and September 2007 and 2012 of all those studied by FE Trustnet so far.
Nineteen IMA UK All Companies funds have achieved top-quartile performance in the two most recent five-year periods, with many of these little-known boutique portfolios.
Notable funds such as Newton UK Opportunities
, M&G Recovery
and AXA Framlington UK Select Opportunities are among the list and are all headed up by FE Alpha Managers.
However, they are joined by more obscure funds such as Unicorn Free Spirit
and Cavendish Opportunities
, which have less than £70m in assets under management (AUM) between them.
The research took into account the returns of all the funds in the IMA UK All Companies sector (excluding trackers) between September 2002 and 2007 and September 2007 and 2012.
All of the funds that boast top-quartile performance in both periods also beat their respective benchmarks – most commonly the FTSE All Share or FTSE 250 (ex IT) indices.
Performance of funds over 5- and 10-yr periods
Source: FE Analytics
FE Alpha Manager Paul Spencer’s Franklin UK Mid Cap
produced the highest returns of the 19 funds on the list, at 370.29 per cent, compared with 114.19 per cent from its sector average, and 269.41 per cent from its mid cap benchmark.
In the tough economic back-drop of the last five years, the fund has returned nearly twice as much as its closest competitor on the list, AXA Framlington UK Select Opps
According to FE data, the Franklin fund has amassed 58.65 per cent over the period, compared with 31.99 per cent from FE Alpha Manager Nigel Thomas’ portfolio.
Performance of fund vs sector and index over 10-yrs
Source: FE Analytics
Between September 2002 and 2007, Franklin UK Mid Cap returned 196.44 per cent, a figure beaten by only Old Mutual UK Select Mid Cap
Bestinvest’s Jason Hollands says it is no surprise that mid to small cap focused funds such as Franklin UK Mid Cap are among the most consistent funds in the sector.
He said: "The fund is not on our recommended list for customers; however there are a lot of mid cap funds out there that have performed very well recently."
"The mid cap space has done very well over the last few years and the reason why these funds have been so consistent compared with the UK All Companies sector is because their index, on the whole, outperformed its large cap counterpart."
However, Hollands believes the Franklin fund is a good choice for investors who wish to gain exposure to the sector.
"To be fair, Franklin UK Mid Cap has performed very well compared with both its sector average and its benchmark,"
"It has a very focused portfolio with around 40 holdings and its success is particularly good given the limited amount of stocks it can choose from."
Franklin UK Mid Cap has a minimum investment of £1,000 and a total expense ratio (TER) of 1.58 per cent. Prior to Spencer’s appointment in 2006, it was headed up by Leigh Himsworth, who is also an FE Alpha Manager.
Unicorn Free Spirit is probably the least well-known fund on the list. It is headed up by Fraser Mackersie
and FE Alpha Manager John McClure
, and has only £5.6m of AUM.
As its name suggests, the fund has a great deal of flexibility when it comes to investing. It currently has close to 80 per cent invested in technology, for example.
In a recent FE Trustnet
article, Mackersie said the sector has matured since the lows of the dotcom crash
back in the early 2000s and now offers investors huge potential on the upside.
It has a minimum investment of £2,500 and a TER of 1.59 per cent.
Cavendish Opportunities is another boutique fund on the list is. The portfolio is headed up by highly experienced manager Paul Mumford, who has run the fund since its inception in 1988.
The five crown-rated fund is £62.9m in size and has a TER of 1.58 per cent. It has a high degree of exposure to oil & gas, and XP Power and Faroe Petroleum appear in its top-10 holdings.