Much has changed in the UK since the excitement that swept through the country prior to opening ceremony for the London 2012 Olympics. 
We have had a new prime minister, the near break-up of the union thanks to the narrow Scottish independence vote and an historic referendum to quit the EU – meaning that, in financial markets terms, it’s been a relatively bumpy ride.
The rallying markets of 2012 and 2013 made way for a far bumpier 2014 and 2015. While 2016 has delivered decent returns for investors, it certainly hasn’t been a smooth journey.
Therefore, with the Olympics in Rio in full swing, FE Trustnet looks at the medal winners since the last games, looking at the top three performers in the UK All Companies, UK Equity Income and UK Smaller Companies sectors since the London opening ceremony.
UK All Companies
Performance of funds vs sector since 27 July 2011
Source: FE Analytics
Gold - Neptune UK Mid Cap; Silver - Old Mutual UK Dynamic Equity; Bronze – CF Lindsell Train UK Equity
Mid-caps have rocketed over the last four years, performing particularly well in 2012 and 2013 as markets turned favourable following a tough 2011, so it is no surprise to see mid-cap funds taking the top two spots in the sector.
The £611m Neptune UK Mid Cap fund, run by FE Alpha Manager Mark Martin, is a fairly concentrated portfolio, investing in 42 stocks. Martin takes a multi-pronged approach to the market, investing across three different ‘silos’ of companies in an attempt to generate decent returns throughout the market cycle.
The fund has returned 125 per cent to investors since the London opening ceremony, has the best Sharpe ratio – a measure of risk-adjusted returns – and in the top quartile within the sector for maximum drawdown – the most an investor could have lost if investing at the best and worst possible times.
The Old Mutual UK Dynamic Equity, which also invests largely in mid-caps though has the ability to go short as well, takes the silver medal in the sector having returned 122 per cent in the same period.
The £359m fund, run by FE Alpha Manager Luke Kerr, has been one of the most volatile in the sector, and unlike the other two fund listed, is also in the bottom quartile for maximum drawdown.
Third in the sector, which has returned 50 per cent to investors since the London Olympics opening ceremony, is the £2.7bn CF Lindsell Train UK Equity fund, which has beaten the sector by 64 percentage points.
The five crown-rated fund is run by FE Alpha Manager Nick Train, it holds 26 stocks, making it more concentrated than the other two, including Unilever, Diageo and Hargreaves Lansdown among its top 10 holdings.
As the only non-mid-cap fund to make the top three, it has a focus on allowing strong business franchises the time to compound returns, meaning it is best suited to a long-term investor.
UK Equity Income
Performance of funds vs sector since 27 July 2011
Source: FE Analytics
Gold - MI Chelverton UK Equity Income; Silver - Marlborough Multi Cap Income; Bronze - Royal London UK Equity Income
Taking gold in the equity income sector is the MI Chelverton UK Equity Income fund, run by David Horner and David Taylor, which currently yields 3.93 per cent with an ongoing charges figure of 0.92 per cent.
The £430m UK small and mid-cap focused fund, with top 10 holdings in Marstons, Halifax and Dairy Crest, concentrates on companies offering a minimum 4 per cent yield and returned 92.42 per cent since the London Olympics got underway.
Following the Brexit result, Horner and Taylor said in the latest note to investors: “Ultimately, as an investor looking for an ‘entry point’ [to small and mid-caps] you cannot argue with cash flow yields and there now appear to be a number of ‘oversold’ opportunities that we can take advantage of.”
Pipped on the line and taking second place is FE Alpha Manager Siddarth Chand Lall’s Marlborough Multi Cap Income fund, which returned 92.14 per cent over the period.
The £1.3bn fund is predominantly invested in the UK, and has been boosted by a number of mid-cap companies, including Greene King and Telecom Plus, which are both in its top 10 holdings, though the fund is more diversified, with around 114 stocks in the portfolio.
It offers a 4.63 per cent yield with an OCF of 0.8 per cent, is second in the sector in Sharpe ratio and is the least volatile of the three funds listed.
In third place is the £1.6bn five crown-rated Royal London UK Equity Income fund, run by Martin Cholwill, and it focuses on companies generating significant free cashflow to fund sustainable dividend payments.
The fund, which currently yields 4.12 per cent and has an OCF of 0.67 per cent, counts the likes of FTSE 100 stalwarts Shell, GlaxosSmithKline and British American Tobacco among its top 10 holdings.
It is the most concentrated portfolio of the three, with 49 holdings, and has returned 89.96 per cent to investors over the period, compared to the 57.8 per cent sector average.
UK Smaller Companies
Performance of funds vs sector since 27 July 2011
Source: FE Analytics
Gold - R&M UK Equity Smaller Companies; Silver - Fidelity UK Smaller Companies; Bronze - Liontrust UK Smaller Companies
Running away with the gold medal in the UK Smaller Companies sector is the R&M UK Equity Smaller Companies fund, managed by FE Alpha Manager Philip Rodrigs.
The £625m fund invests in companies that reside in the bottom 10 per cent of the UK stock market in terms of market capitalisation and includes Fevertree Drinks, Paysafe and Conviviality among its top 10 holdings.
It has been among the most volatile in the sector, but has the third highest Sharpe ratio (behind the other two listed), and has returned 144 per cent to investors since the London Olympics kicked off.
Taking the silver medal over the period is the Fidelity UK Smaller Companies fund, run by Jonathan Winton and FE Alpha Manager Alex Wright, which returned 127 per cent.
The value-focused nature of the £347m fund is different to many in the sector (which typically concentrate on growth).
Square Mile said: “This approach has proved very successful since the fund's launch and though there will be periods when this style of investing is out of favour it should reap rewards over the long term.”
Pipped to the silver medal was the five-crown rated Liontrust UK Smaller Companies, run by FE Alpha Managers Anthony Cross and Julian Fosh, as well as Victoria Stevens and Matthew Tonge.
The £467m fund uses the firm’s ‘economic advantage’ model whereby they focus on companies with durable characteristics, and include the likes of Craneware and Renishaw in its top 10 holdings.
It is among the least volatile in the sector and has the best Sharpe ratio, while it’s also top for maximum drawdown, and has returned 125 per cent during the period, 61 percentage points ahead of the sector.
