That’s because they will have built up a huge amount of experience and proved themselves in various market conditions.
However, the recent rebalancing of the manager rankings showed there are a number of FE Alpha Managers that have already built up a successful track record, despite the fact they are younger than the majority of their rivals.
Here we highlight a selection of the top-performing FE Alpha Managers that are still under the age of 40.
Alex Wright
Alex Wright has grown increasingly popular with advisers and retail investors over recent years, and for good reason.
The manager is renowned for taking a value approach to investing and, according to FE Analytics, his Fidelity UK Smaller Companies fund is the best performer in the IMA UK Smaller Companies sector – and the second-best performer in the whole IMA universe – since its launch in February 2008.
It has returned 248.71 per cent over this time, beating its benchmark – the Numis Smaller Companies ex IT index – by more than 130 percentage points.
Performance of fund vs sector and index since Feb 2008
Source: FE Analytics
Unfortunately, the fund was soft-closed last year due to its growing size.
However, Fidelity clearly rates and trusts Wright, as not only was he handed the responsibility of the Fidelity Special Values Investment Trust in September 2012 (which has since tripled the returns of the FTSE All Share), but the manager also took over Fidelity’s flagship Special Situations fund from Sanjeev Shah at the start of this year.
While some experts say investors should be aware that Wright has built up a very good track record running a smaller pot of money and that his new £2.9bn fund does carry a lot of pressure, the consensual view is that he is more than capable of continuing to beat his peers.
Wright’s colleague Nicola Stafford, who runs the FF Global Consumer Industries fund, is also an FE Alpha Manager and under the age of 40.
She has delivered a return which is seven times greater than her peer group composite since she began managing portfolios in January 2008.
Alex Savvides
Sticking with UK equities, Alex Savvides has also built up an impressive track record as manager of the JOHCM UK Dynamic fund.
He invests in stocks that have underperformed the market. However, his fund is very different from the run-of-the-mill special situations or recovery funds in that it only targets companies that pay a yield or that are predicted to pay one in the next financial year.
Savvides launched his now £112m fund in June 2008, which was clearly a difficult time.
However, our data shows that it is a top-quartile performer in the sector since then, with returns of 113.1 per cent, and has more than doubled the returns of the FTSE All Share.
Performance of fund vs sector and index since June 2008
Source: FE Analytics
JOHCM UK Dynamic also boasts top-quartile returns over rolling one-, three- and five-year periods, having only underperformed against the sector in one calendar year since its launch.
That was in the falling market of 2011, where the fund was third quartile with losses of 8.57 per cent.
The manager isn’t afraid to take big active bets in his portfolio. For example, he counts both Centrica – which has underperformed due to implied political risk – and mining stock Anglo American as top-10 holdings.
Savvides also deputises on the JOHCM UK Growth fund, which is headed up by his fellow FE Alpha Manager Mark Costar.
Edward Lam
Emerging market equities have had a very poor run recently, especially compared with developed ones, as various macroeconomic headwinds have contributed to negative sentiment towards the sector.
However, a number of active managers who operate in this space have been able to effectively protect their investors' capital.
One such manager is Somerset’s Edward Lam, whose five crown-rated Emerging Markets Dividend Growth fund has become popular because of its style and outperformance.
The £506m fund has returned 14.12 per cent since launch in March 2010. While this may not seem like a lot, the IMA Global Emerging Markets sector and MSCI Emerging Markets index have lost 5.88 per cent and 6.2 per cent, respectively, over the same period.
Performance of fund vs sector and index in Mar 2010
Source: FE Analytics
It has also been a top-quartile performer over one and three years. However, it has still lost 10 per cent over 12 months.
Lam recently told FE Trustnet he thinks emerging market equities could continue to fall over the short-term and is sitting on a 12 per cent cash weighting as a result.
However, he says it is a tactical decision and is waiting for a chance to pick up his favoured companies at lower prices.
Somerset’s Mark Asquith also fits the criteria. However, his five crown-rated Somerset Emerging Markets Small Cap fund was soft-closed a couple of years ago because he wanted to maintain his investment strategy without being hindered by a large AUM.
Jenna Barnard
Fixed interest is another area of the market that has been out of favour recently.
The majority of advisers and fund researchers say that with yields on government bonds expected to steadily rise over time, and the fact that interest rates will have to be increased at some stage, then investors should be allocating their fixed income exposure to managers that can invest across the market.
As a result, the IMA Sterling Strategic Bond sector is becoming more and more popular with investors.
Barnard is probably best known for managing the £1bn Henderson Strategic Bond fund along with fellow FE Alpha Manager John Pattullo.
She also manages four other portfolios, which include Henderson’s Cautious Managed and Fixed Interest Monthly Income funds.
She also has a good track record compared with her peers.
Our data shows that she has returned 70.68 per cent since she began running funds in January 2006 while her peer group composite has returned 39.18 per cent.
Performance of manager vs peers since Jan 2006
Source: FE Analytics
Her Strategic Bond fund is the sixth-best performing portfolio in its sector since she began co-managing it with Pattullo.
Henderson’s Luke Newman is another FE Alpha Manager under the age of 40.
He heads up the five crown-rated Henderson UK Absolute Return fund with Ben Wallace, who is an FE Alpha Manager as well.
It has delivered a positive return in three out of the four calendar years since it was launched, the exception being in 2011 when it lost 0.44 per cent.
