IA UK All Companies funds such as JOHCM UK Opportunities, Invesco Perpetual UK Strategic Income and Liontrust Special Situations have the strongest track records of giving investors a less bumpy journey than the FTSE All Share, research by FE Trustnet suggests. 
Although avoiding volatility will not be the primary concern of all investors all of the time, many prefer to hold funds that have a history of avoiding the worst turbulence of the market.
However, when we look at the IA UK All Companies sector we find that its average member has tended to witness more volatility than the FTSE All Share.
Data from FE Analytics suggests that the average UK equity fund has experienced more periods when its annualised volatility was higher than that posted by the index than it has when volatility has been lower. This trend can be seen in the following chart.
Annualised volatility of the IA UK All Companies sector vs the FTSE All Share
Source: FE Analytics
In order to find out which funds from the peer group have been most successful in consistently posting lower annualised volatility than the FTSE All Share over recent years, we examined the 66 quarterly one-year periods that span 1 January 2000 to 31 March 2017 to see how often IA UK All Companies funds had performed better than the FTSE All Share.
When it comes to the average member of the sector, the results are a little lacklustre. Our data shows the IA UK All Companies sector has posted lower volatility than the index in just 27 of the 66 periods, or 41 per cent of the time.
But when looking at the individual funds in the sector (stripped out those that do not have at least 40 periods of track record), several have been able to post lower volatility than the FTSE All Share on a fairly consistent basis.
We found that 29 funds have achieved this feat and one of them has given investors a smoother ride than the index 90 per cent of the time.
As the table below – which reveals all the funds that have been less volatile than the index for 50 per cent or more of the one-year periods – shows, JOHCM UK Opportunities is the fund that comes out on top after giving investors a bumpier ride than the FTSE All Share in just 10 per cent of the 12-month periods examined.
Source: FE Analytics
JOHCM UK Opportunities has been headed up by FE Alpha Manager John Wood since 2005, although he will retire in September this year. Rachel Reutter and Michael Ulrich, who are currently co-managers on the £1.8bn fund will take over the portfolio, with support from analyst Todd King.
The process behind the fund – which focuses on stocks poised to benefit from long-term global tailwinds – is designed to generate positive returns in all market conditions. However, it has tended to perform slightly better in falling markets rather rising ones.
Performance of fund vs sector and index over 10yrs
Source: FE Analytics
Despite being consistently less volatile than the index and the sector, the five FE Crown-rated fund has outperformed both over the long run when it comes to total returns. It is not the only fund on the list to achieve this.
FE Analytics shows that 19 of the 27 lower-volatility funds with a long enough track record are beating the FTSE All Share on a 10-year view.
Liontrust Special Situations, which is headed up by the FE Alpha Manager duo Anthony Cross and Julian Fosh, has made the highest total return of them after gaining 204.48 per cent. It has been less volatile than the index in 76 per cent of its 42 periods of track record.
Chris Field, James de Uphaugh, Matthew Smith and Richard Staveley’s Majedie UK Equity fund is next with a 144.19 per cent return while Aviva Investors UK Equity MoM 1 (which is run for the firm by Lindsell Train Investments) and Ben Whitmore’s Jupiter UK Special Situations come next.
Performance of funds vs sector and index over 10yrs
Source: FE Analytics
Invesco Perpetual UK Strategic Income, Franklin UK Rising Dividends, Investec UK Special Situations and Newton UK Opportunities are examples of other funds that have beaten the index with fewer periods of higher volatility.
Of course, low volatility is no guarantee of outperformance and on the list of funds there are eight that have posited a lower total return than the FTSE All Share.
Aviva Investors UK Equity MoM 2 is in bottom place with a 21.67 per cent loss. Other funds that have returned less than the index (but have posted positive returns) include Schroder MM UK Growth, Candriam Equities L United Kingdom and Virgin UK Index Tracking.