The phrase "we’re in unprecedented territory" is currently one of the most overused in the industry. With politics shaping markets more than fundamentals in many regions at the moment, and the longer-term effects of quantitative easing (QE) still unknown, entrusting money to a manager who has encountered numerous market conditions is an appealing prospect.
Here are five top-rated managers each with more than 20 years of industry experience under their belt:
A manager who needs little introduction, Neil Woodford is one of the most respected figures in the industry. His two Invesco Perpetual Income funds are among the most popular with retail investors, thanks to his tried and tested strategy of backing defensive, cash rich companies on attractive valuations.
Performance of fund vs sector and index over 20-yrs
Source: FE Analytics
According to FE data, his flagship Invesco Perpetual High Income
portfolio has returned 1,016.61 per cent over the last two decades, compared with 437.17 per cent from its IMA UK Equity Income sector average and 394.78 per cent from the All Share.
No fund in its sector has come close to matching these returns over the period.
A £1,000 investment in the fund 20 years ago would now be worth £11,166.
Invesco Perpetual High Income has also been less volatile over the cumulative period and has outperformed both its sector and index over three, five and 10 years.
Woodford took over the portfolio in October 1988 – almost exactly a year after Black Monday. He then took charge of the Invesco Perpetual Income fund in October 1990. He now manages or co-manages seven open- and closed-ended portfolios at the firm.
Invesco Perpetual High Income has a minimum investment of £500 and a total expense ratio (TER) of 1.69 per cent. The five crown-rated fund has almost £12bn assets under management (AUM) and is currently yielding 3.8 per cent.
Angus Tulloch’s First State Asia Pacific
fund has been a top-quartile performer for more than 20 years. The manager took over the portfolio in June 1988 and later began running the similar First State Asia Pacific Leaders
fund in December 2003.
Since January 1995 – the furthest that FE Trustnet
data goes back for First State Asia Pacific – it has returned 630.63 per cent, beating its IMA Asia Pacific ex Japan sector average by more than 400 percentage points. It has also been less volatile and has a stronger record over one, three, five and 10 years as well.
Like Woodford, Tulloch prefers quality, cash-rich companies to those that are highly leveraged and economically sensitive. He pays little attention to his benchmark, instead focusing on capital protection, even if this means underperforming in rising markets.
First State Asia Pacific is closed to new investors, although the Leaders fund remains open for a minimum investment of £1,000 and a TER of 1.55 per cent. However, First State said recently it is investigating methods of “slowing inflows” into the £6bn portfolio.
On average, investment trusts have a longer manager tenure than their open-ended rivals, but few have been run by a single individual for longer than the Capital Gearing Trust
Peter Spiller took over as lead manager of the sector-leading portfolio in January 1982. He has guided the trust through numerous market crises – Black Monday, the Asia crisis, the dotcom crash and credit crunch, to name but a few.
Performance of trust vs sector and index since July 1995
Source: FE Analytics
Our data for the trust only goes back to January 1995, but it is still clear the manager boasts a stellar long-term track record.
According to FE Analytics
, the Capital Gearing Trust has returned 616.21 per cent over the period, more than three times as much as its FTSE Investment Companies benchmark.
It has also been significantly less volatile, and came out on top in the down markets of 2002, 2008 and 2011.
The trust has also significantly outperformed over one, three, five and 10 years, again with less volatility and downside risk.
The £87m portfolio is a trust of trusts, which means that it invests almost entirely in closed-ended funds. It is an exceptionally diversified portfolio, with only 9 per cent invested in its top-10 holdings. Only three holdings have an exposure of more than 1 per cent.
The trust has a TER of 1.4 per cent.
The only fixed interest manager of the five, Ian Spreadbury has been running funds since 1985. He joined Fidelity from L&G in 1995, and since then has led multiple bond portfolios to the top of the sector standings over the medium- and long-term.
He is perhaps best known for the Moneybuilder Income
portfolio, which is among the most popular bond funds with retail investors.
The £3.2bn fund has returned 188.76 per cent since September 1995, compared with 143.94 per cent from the average Corporate Bond portfolio. It is also a top-quartile performer over five- and 10-year periods, with returns of 38.69 and 65.86 per cent respectively.
It has a minimum investment of £500 and a TER of 1 per cent.
While perhaps not as high profile as some others on the list, Cavendish’s Paul Mumford is a true industry stalwart, guiding his Cavendish Opportunities portfolio to the top of the league tables over the long-term.
He took over the five crown-rated portfolio in May 1988, and since then has delivered 681.22 per cent, more than doubling the returns of its FTSE Small Cap (ex IT) benchmark, which has returned 279.9 per cent.
It has also significantly outperformed both the index and its sector average over three, five and 10 years.
Performance of fund vs sector and index
Source: FE Analytics
||1-yr returns (%)
||3-yr returns (%)
||5-yr returns (%)
||10-yr returns (%)
||20-yr returns (%)
|Cavendish - Opportunities
|FTSE Small Cap Index (ex IT)
|IMA UK All Companies
It is a high-Beta portfolio, which tend to outperform in rising markets but lose out heavily in falling ones. In 2008, for example, the fund lost 50.36 per cent – almost 20 percentage points more than the average UK growth fund.
However, it more than compensates for this during up periods, where it more often than not shoots the lights out. In 2009 alone, the fund delivered more than 75 per cent.
Mumford prides himself on being a long-term investor and pays little attention to the macro environment, instead concentrating on bottom-up analysis.
He has significant exposure to mid and small caps, as well as cyclical stocks in the oil & gas and industrial sectors. Nautical Petroleum, Faroe Petroleum and XP Power are all top-five holdings.
The fund has a minimum investment of £2,500 and a TER of 1.58 per cent. Mumford also heads up Cavendish AIM and Cavendish UK Select.