The strongest fund managers are the ones who find their purpose alongside making returns, although it can take a long time before they figure out what this is, according to Baillie Gifford’s Julia Angeles (pictured).
A fund manager’s primary role is to act as a steward of their clients’ investments, but Angeles said this went beyond making returns. She said it was also important to work out what these returns mean to your clients, and whether their investments can have a positive impact on society.
“If I had not found that purpose, I'm not sure I would be still doing this job,” she said. 
The manager said it took her about eight years to identify her purpose, adding this was one of the biggest lessons she has learnt during her time running the Baillie Gifford Healthcare Innovation fund, and previously the Baillie Gifford Positive Change portfolio. Angeles said fund managers should start asking themselves what their purpose was early on in their career if they wanted to be a strong investor.
“It is about realising your role as an active investor, and I don’t mean active versus passive, but what we can do for our companies to make them better. This is not in contradiction of trying to deliver superior returns for our clients, because if our companies are getting better, the results will follow.”
She added that the fund management industry was “starting to change its face” and think less about short-term and finance-driven goals, becoming more purposeful instead. But she said there was still some way to go.
This notion about what constitutes a fund manager’s primary duty is personal, with every manager interpreting it differently.
For Noelle Cazalis, manager of the Rathbone Strategic Bond fund, she feels responsible for ensuring she has the same level of transparency with her clients about positioning and process as she expects from the companies she invests in.
“All that information will help them understand what product they’re buying and how it will behave when markets are tough”, Cazalis said.
Abby Glennie, co-manager on the ASI UK Smaller Companies fund, said understanding the limitations of a fund was important when holding managers to account.
Her portfolio invests in growth and momentum – key elements of co-manager Harry Nimmo’s ‘Matrix’ process – which means “value rallies, like the ones we have seen in the last year, are the hardest times for us”.
The fact that the fund has lagged the rally “ironically proves that we are invested how we say we are,” she said.
“If we were outperforming at the moment, there would be big question marks.”
Glennie said that the fund management industry has shifted away from the cult of the star manager since she started her career and now focuses more on investment processes instead. She approved of this shift, saying a name alone does not deliver outperformance.
“There used to be a lot of headlines about star managers when I started and, as much as the people side of it is really important in terms of the skills and what we bring as managers, I think it's a combination of that with a really good investment process that is actually key to delivering high performance,” she said.
“That is one of the big things I’ve noticed”.
Knowing how a fund will navigate different market conditions ultimately lets investors plan for different scenarios. In uncertain environments, such as the one we are currently experiencing, she said it was vital to remember three golden rules: invest for the long-term, ignore the noise and remember the power of compounding. But they admitted this was easier said than done. 
Judith MacKenzie (pictured), founder of Downing Fund Managers and head of the MI Downing UK Micro-Cap Growth fund, said that having the discipline and confidence to stick to her process when markets get tough was one of the major lessons she has learnt over the past 30 years.
“Do not get divested away by shiny trends, especially when you’re underperforming,” she said.
According to M&G’s Eva Sun-Wai, staying neutral is as meaningful an investment call as buying or selling, especially during periods of higher volatility.
She said you can fall under the illusion that buying or selling are the only options you have when markets are spiralling, or that making one of these moves was “more important than just holding”.
“I'd say that all three of those are equally as important.”
Sun-Wai has been tested on this since she joined Jim Leaviss as manager on the M&G Global Macro Bond in 2019. “My entire fund manager career has been through global shocks, more or less,” she said.
Running money throughout Brexit, the Covid pandemic, trade wars, US presidential elections and central banks’ recent tightening has confirmed to her the importance of remining calm in a crisis.
The manager added that if you try to change too much, you usually end up hurting your portfolio “because you are following a trade and coming into it late rather than being on the right side of it from the beginning”.