Funds from Artemis, Liontrust and Franklin Templeton are among those that The Share Centre’s Lucinda Gregory says investors can back for the long term like Warren Buffett’s investment vehicle Berkshire Hathaway. 
Buffett (pictured) has become world-renowned for his value approach to investing success in markets, turning a small textile business into a conglomerate with a market capitalisation of $506.1bn.
Since 1965, Berkshire Hathaway has grown at a compound annual rate of 20.5 per cent compared with 9.7 per cent for the S&P 500.
Performance of Berkshire Hathaway vs S&P 500 since 1965
Source: Berkshire Hathaway
It is Buffett’s maxim – “be fearful when others are greedy, be greedy when others are fearful” – that has come to sum up his approach to investing and explain his success, according to Gregory
“In layman’s terms, he is saying that when others are greedy, one should be careful to prevent overpaying for an asset as prices boil over,” she explained. “Equally, when others are fearful, selling opportunities may arise, allowing investors to take advantage of low stock valuations.”
However, does his advice hold up in real life? The analyst said it takes a strong person to go against the crowd.
“Fear is ingrained in our psyche and can hold great influence over our investment decisions, causing us to stop thinking for ourselves, hence following the crowd,” she added.
“A little fear can be healthy, ensuring we evaluate our decisions, but it is important not to panic in times of political uncertainty and market volatility.
“Volatility can be a friend of the unemotional, patient investor, offering the opportunity to buy good businesses at bargain prices.”
One such example facing UK investors now is the ongoing uncertainty surrounding Brexit, but it could also be a time to be brave, said the analyst.
“With much of the Brexit uncertainty already priced into the market, UK assets appear to be reasonably valued and offer good investment opportunities,” said Gregory. “The UK is full of world-class companies that should be able to prosper in the future regardless of the current economic climate.”
She added: “It is also worth noting the FTSE All Share is currently yielding 4.4 per cent, significantly higher than its 30-year average of 3.5 per cent, providing an attractive income stream.”
As such, Gregory said there are several funds that UK-focused long-term investors can consider.
Artemis Income
First up is the £5.8bn Artemis Income fund, which has been headed up by veteran manager Adrian Frost since 2002, with Nick Shenton joining in 2014 and Andy Marsh last year. The equity income fund targets capital growth and a yield higher than that of the FTSE All Share index.
“This fund focuses on companies that have a competitive advantage, barriers to entry and can create value sustainably,” said The Share Centre analyst. “Delivering an above-average risk-adjusted return, compared with its peers, it would be suitable for investors seeking core exposure to UK equities.”
Since Frost joined Artemis Income, it has returned 302.48 per cent, outperforming both its IA UK Equity Income peer group (199.58 per cent) and FTSE All Share benchmark (189.15 per cent).
Performance of fund vs sector & benchmark under Frost
Source: FE Analytics
Yet the managers have little of value to add on the subject of Brexit, saying that there are no experts who can foretell what could happen next.
“Having performed rather better of late, UK equities are perhaps again vulnerable to any Brexit-related setbacks or surprises,” they wrote in the most recent factsheet.
“At the same time, the UK’s valuation discount relative to other markets still holds. So, any resolution of the current uncertainty would be likely to prompt a positive reaction.”
Artemis Income has a yield of 4.48 per cent and an ongoing charges figure (OCF) of 0.8 per cent.
Liontrust Special Situations
Next up on The Share Centre’s list is Liontrust Special Situations, overseen by FE Alpha Managers Anthony Cross and Julian Fosh. Cross has managed the £4.8bn fund since 2005 and was joined by Fosh in 2008
Liontrust Special Situations – which also holds five FE Crowns – is a multi-cap strategy investing in a concentrated portfolio of around 50 companies. It follows the proprietary ‘Economic Advantage’ process.
“The investment process looks for companies with criteria such as intellectual property, strong distribution channels and recurring business,” said Gregory.
Over the past 10 years, the fund has made a total return of 384.12 per cent, compared with a 155.34 per cent rise for the average IA UK All Companies peer and a 148.06 per cent gain for the FTSE All Share benchmark.
Liontrust Special Situations has an OCF of 0.87 per cent.
Franklin UK Mid Cap
Next up is the four FE Crown-rated Franklin UK Mid Cap fund, a specialist strategy focused on the best ideas from the FTSE 250 index.
The £1bn fund is helmed by FE Alpha Manager Paul Spencer who joined in 2006. He works alongside co-managers Mark Hall and Richard Bullas.
“Unconstrained in terms of portfolio positioning, the fund is carefully monitored in order to avoid any sector bias,” said Gregory.
“The managers have a very consistent high-conviction investment process, which results in the fund’s strong track record of outperforming the market over a full cycle.”
Performance of fund vs sector & benchmark under Frost
Source: FE Analytics
As the above chart shows, the fund has returned 309.12 per cent over the past 10 years against a 230.02 per cent rise for the FTSE 250 (ex IT) index.
Franklin UK Mid Cap has an OCF of 0.82 per cent.
CFP SDL UK Buffettology
The final fund on The Share Centre’s list is CFP SDL UK Buffettology, a fund that admires Buffett’s ‘business perspective’ style so much that FE Alpha Manager Keith Ashworth-Lord has been granted the licence to use the term in Europe.
Ashworth-Lord builds a portfolio of 25 to 35 holdings with a bias towards small- and medium-sized companies and has built a strong track record since launching the fund in 2011.
“The fund aims to achieve performance that is superior compared with the UK stock market by investing for the long term: five to 10 years,” said Gregory. “Ashworth-Lord applies a well-defined high-conviction stock-selection process, running a concentrated portfolio of undervalued UK companies.”
Since launch, CFP SDL UK Buffettology has made a total return of 235.31 per cent, against a rise of 77.83 per cent from its average IA UK All Companies peer.
“I am often asked under what conditions I would expect the fund to underperform the wider market,” Ashworth-Lord noted recently. “My response has never focused on that false dichotomy between growth and value, nor on momentum.
“Rather it has been to point out that there are sectors of the stock market to which we have no current exposure because they lie outside my comfort zone.”
The £872.2m fund has an OCF of 1.23 per cent.