Fidelity Special Situations, Marlborough UK Multi-Cap Growth and EdenTree UK Equity Growth are among the funds currently in the top quartile of the IA UK All Companies sector over a number of time frames.
The past decade has presented investors with a range of conditions to deal with. Looking at 10-year returns means the impact of the global financial crisis is included in performance figures, while reducing the time frame to five years strips out this fall and puts more emphasis on strong bull years like 2013.
Moving more into the short term and a three-year view of performance is more made up of leaner years like 2015 while a one-year view captures the fallout of the UK’s decision to leave the EU.
Source: FE Analytics
With this in mind, we applied filters to the IA UK All Companies sector to see which funds turned in top quartile numbers for the one-, three-, five- and 10-year periods to the end of June 2017. Of course, these numbers are only up to one date but nonetheless might be useful in highlighting funds that been successful in a range of market conditions.
In all, 13 members of the sector are in the top quartile for each of the four time frames but many of these are focused on the mid-cap part of the market, which has enjoyed a strong run. Over the following pages we focus on five IA UK All Companies funds that are not restricted to this part of the UK stock market but are still topping the sector, ranked by their 10-year total returns.
Premier Ethical
Performance of fund vs sector and index over 10 years to end of Jun 2017
Source: FE Analytics
First in the gallery is Chris Wright’s £151.2m Premier Ethical fund. It has made 29.77 per cent over one year, 35.77 per cent over three years, 121.50 per cent over five years and 111.59 per cent over 10 years to the end of June 2017. As its name suggests, it invests in UK companies with business models based on ethical principles; it has an emphasis on companies that “contribute to the requirements of a sustainable civilised society and whose products or services are of widespread benefit to the community”. At the moment, its top holdings are HSBC, Prudential and Legal & General. Financials is the largest sector weighting at 34.9 per cent, followed by consumer discretionary and industrials. Premier Ethical has an ongoing charges figure (OCF) of 0.92 per cent.
Fidelity Special Situations
Performance of fund vs sector and index over 10 years to end of Jun 2017
Source: FE Analytics
Next up is Fidelity Special Situations, which is run by FE Alpha Manager Alex Wright. He took over in January 2014 and previous managers of the flagship fund include Sanjeev Shah and Anthony Bolton. The £3.2bn fund has posted a 30.62 per cent total return over one year, 40.98 per cent over three years, 113.25 per cent over five years and 113.49 per cent over 10 years to the end of June 2017. Square Mile Investment Consulting & Research, which has the fund on its ‘positive prospects’ list, said: “With a view that the market can be slow to react to a changing situation, Mr Wright searches for unloved and out of favour stocks which are entering a period of positive change. He is ultimately looking to purchase companies before the market has recognised their improving growth prospects and as such, he has a value and contrarian investment style.” Top positions include Citigroup, Royal Dutch Shell and CRH. Fidelity Special Situations has a 0.94 per cent OCF.
EdenTree UK Equity Growth
Performance of fund vs sector and index over 10 years to end of Jun 2017
Source: FE Analytics
The £168.7m EdenTree UK Equity Growth fund has made 30.07 per cent over one year, 33.07 per cent over three years, 109.43 per cent over five years and 136.68 per cent over 10 years to the end of June 2017. Philip Harris has worked on the portfolio since September 2015 while Ketan Patel joined it a year later; the bulk of the long-term track record was built under Andrew Jackson, who is now with Miton. The portfolio tends to be built around UK stocks where the manager see the potential for long-term growth, with a “reasonable” level of income. To this end, its largest weightings are to Fever-Tree, Bellway and Scapa Group. EdenTree UK Equity Growth has a 0.79 per cent OCF and is yielding 1.98 per cent.
Marlborough UK Multi-Cap Growth
Performance of fund vs sector and index over 10 years to end of Jun 2017
Source: FE Analytics
FE Alpha Manager Richard Hallett’s Marlborough UK Multi-Cap Growth fund comes next after making 28.85 per cent over one year, 54.39 per cent over three years, 117.71 per cent over five years and 162.75 per cent over 10 years. Unlike some multi-cap funds, the five FE Crown-rated fund invests across the market cap spectrum and currently has 14.3 per cent of its portfolio in mega caps, 16.5 per cent in large caps, 42.2 per cent in mid caps and 18.5 per cent in small caps. While this research only looks at cumulative returns to the end of June 2017, a recent FE Trustnet study focused on funds that have beaten the FTSE All Share over rolling five-year periods since the start of the millennium found this portfolio was one of the strongest in the sector when it comes to consistent outperformance of the index. Marlborough UK Multi-Cap Growth has a 0.85 per cent OCF.
MFM Slater Growth
Performance of fund vs sector and index over 10 years to end of Jun 2017
Source: FE Analytics
In the top spot of this gallery after making 260.53 per cent in the 10 years to the end of June 2017 is MFM Slater Growth; its other top-quartile numbers are a 32.25 per cent return over one year, 46.25 per cent over three years and 126.94 per cent over five years. The £449.8m fund is headed up by FE Alpha Manager Mark Slater and its 10-year return is the highest in the IA UK All Companies sector over this time frame. Slater, who is also co-founder, chairman and chief investment officer of Slater Investments, looks for companies with solid competitive positions, strong balance sheets, a high rate of conversion of profits into cash and good free cash flow generation. As a bottom-up stock picker, he pays little attention to the make-up of the FTSE All Share and his unconstrained portfolio has a high exposure to small- and mid-caps. Its top holdings currently are Hutchison China Meditech, First Derivatives and CVS Group. MFM Slater Growth has a 0.80 per cent OCF.