However, many of these managers run lesser-known closed-ended vehicles that have left even these outperforming funds in the dust over the medium- to long-term.
FE Trustnet takes a look at five of the biggest-name fund managers in the UK and puts their funds and investment trusts head to head.
Neil Woodford – Edinburgh IT
FE Alpha Manager Neil Woodford’s Edinburgh Investment Trust has outperformed his Invesco Perpetual High Income and Income portfolios over one, three, five and 10 years.
Over the last decade, the four crown-rated trust has made 270.31 per cent while the High Income and Income funds have gained 260.69 per cent and 252.12 per cent, respectively.
Performance of trust vs funds over 10yrs
Source: FE Analytics
Over the medium-term the discrepancy is even wider, with the trust outpacing both open-ended funds by more than 20 percentage points over three and five years.
Edinburgh IT also yields more, its payout of 3.9 per cent beating the 3.33 per cent from the Higher Income fund and 3.38 per cent from the Income one.
However, over the longer term the open-ended funds have surged ahead on a total return basis, beating the trust by more than 400 percentage points since 1995.
The trust is less expensive than the open-ended funds, with ongoing charges of 1.12 per cent. This figure includes the performance fee. The funds each have an ongoing charges figure (OCF) of 1.68 per cent.
The trust is trading on a premium of 2.8 per cent with 2 per cent gearing, according to the AIC.
Harry Nimmo – Standard Life UK Smaller Companies Trust
The FE Alpha Manager is well known for his four crown-rated Standard Life UK Smaller Companies fund.
Over the last decade, however, investors in its mirror trust would have been more than 400 percentage points better off, according to FE Analytics.
The closed-ended trust has made 871.98 per cent over the last 10 years, while Nimmo’s UK Smaller Companies fund gained 445.45 per cent – a top-quartile figure in the IMA UK Smaller Companies sector.
Performance of fund vs trust over 10 yrs
Source: FE Analytics
The trust has outpaced the fund over one, three and five years – albeit with more volatility.
Investors who were willing to buy and hold Nimmo’s open-ended fund over the extreme long-term would have seen higher returns, however. Since January 1997, the fund has made 664.74 per cent, while the trust has picked up 201.59 per cent.
The trust has ongoing charges of just 1 per cent, compared with 1.69 per cent for the fund.
It is trading on a discount of 4.6 per cent, with 9 per cent gearing. It is currently yielding 1.3 per cent. The open-ended fund is yielding just 0.36 per cent.
Alexander Darwall – Jupiter European Opportunities
Jupiter’s Alexander Darwall is one of the most outstanding managers in the UK, running more five crown-rated portfolios than any of his peers.
His investment trust is even more impressive than his retail funds.
Since its launch in 2008, it has returned 139.64 per cent, compared with 75.65 per cent from the fund.
Performance of fund vs trust since launch
Source: FE Analytics
It has continued to outperform the fund over one and three years, as well as in the extreme short-term.
The trust is trading on a premium of 1.2 per cent and is geared at 13 per cent. It has a yield of 0.5 per cent.
It has ongoing charges of 1.19 per cent, compared with 1.82 per cent for the five crown-rated Jupiter European Growth fund.
James Henderson – Lowland Investment Company
Henderson’s UK Equity Income portfolio is one of the most popular in its sector, and has consistently outperformed over one, three, five and 10 years.
However, the FE Alpha Manager’s Lowland Investment Company has delivered nearly 300 percentage points more than his open-ended product since 1995.
Performance of trust vs fund since 1995
Source: FE Analytics
The trust has significantly outperformed the fund over one, three, five and 10 years.
It has done so with more volatility, however.
Lowland IT has an annualised volatility of 21.47 per cent over the last decade, compared with 17.66 per cent from the fund, according to FE Analytics.
The trust is trading on a discount of 3 per cent, with 13 per cent gearing. It has a yield of 2.7 per cent – lower than the fund, which is paying out 3.1 per cent.
The trust is less expensive, its ongoing charges of 0.92 per cent, including the performance fee, are almost half of the fund's 1.75 per cent.
John McClure – Acorn Income
While Acorn Income and Unicorn UK Income are undoubtedly impressive, delivering top-quartile performance over one, three, and five years, the trust has easily outstripped the fund over each period.
Unicorn UK Income has made 183.04 per cent since its launch in 2004, compared with 310.52 per cent from the trust.
Performance of fund vs trust since launch
Source: FE Analytics
Acorn Income has a yield of 4.3 per cent, compared with 3.18 per cent from the fund.
Investors can also purchase a zero-dividend share class for the trust, which is trading on a premium of 7.9 per cent. FE Trustnet will take an in-depth look at the Acorn Income trust later in the weekend.
It is trading on a discount of 2.7 per cent and is geared at 49 per cent.
The management fee of the trust is 0.7 per cent, which does not include the performance fee. The fund has an OCF of 1.59 per cent.