Baillie Gifford, Artemis and Liontrust are the three big fund groups with the highest proportion of top quartile funds so far this year, according to research by FE Trustnet.
For this study, FE Trustnet took all the funds run by each fund group across the Investment Association (IA) universe and calculated their year-to-date (YTD) performance from the beginning of January to the end of July 2018.
Next, we removed the funds from sectors where comparisons between the constituents are inappropriate: IA Targeted Absolute Return, IA Specialist, IA Unclassified, IA Volatility Managed alongside the two money market sectors.
Then, we calculated what proportion of funds per fund group fell into each quartile in their sectors for their YTD performance.
Finally, we filtered those groups that had a total number of 20 funds or more to narrow down our search to the bigger, most well-known fund managers.
The results showed that Baillie Gifford topped the table with 60 per cent of their funds achieving top quartile performance so far this year, or 18 out of 30 funds.
Performance of funds YTD
Source: FE Analytics
Notable funds include the fund manager’s top YTD performer, Baillie Gifford American, which is up 29.16 per cent, and Baillie Gifford Global Discovery, which has gained 20.34 per cent this year.
Both funds have been good long-term performers and are top quartile over three, five and 10 years.
It may be worth noting that Baillie Gifford as an investment house has a strong bias towards growth stocks, which may have played a part in the strong performance of the company’s funds in recent years as the style has generally outperformed the value investing more recently.
Up next, Artemis and Liontrust both had 50 per cent of their 22 funds in the top quartile for year-to-date performance.
Artemis’ top performer was the Artemis US Smaller Companies fund, which is up 16.34 per cent, while Liontrust’s best performing fund, Liontrust UK Micro Cap, has gained 14.61 per cent.
The UK and US smaller companies sectors that the above funds fall into have been among the best-performing sectors so far this year meaning the strong performance of small-cap funds may come as little surprise to investors.
The first passive fund manager on the list is the American giant Vanguard, which, at sixth place, found its way near the top of the list and counted 40 per cent (16/40) of its funds in the top quartile of their respective sectors for their performance so far in 2018.
Its range of Vanguard Target Retirement funds did particularly well, with eight of the 11 funds in the range producing top quartile figures.
The fund management group with the highest number of funds under one house was the recently-merged Aberdeen Standard, which had 119 portfolios in the study.
Its figures were split fairly evenly across the board with 26.1 per cent of its funds in the top quartile, 33.6 per cent in the second quartile, 23.5 per cent in the third quartile and 16.8 per cent in the bottom quartile.
Source: FE Analytics
When separated into the two former companies, Aberdeen Asset Management and Standard Life Investments, the analysis showed that there was no significant difference in the amount of top quartile performers in the two groups.
At the bottom of the list was HSBC, with HSBC Open Global Distribution – up 1.44 per cent YTD – the only one of its 35 funds (2.9 per cent) in the top quartile of its sector for year-to-date performance.
Other fund managers at the bottom of the list for top quartile performers were Sarasin, Old Mutual, Barclays and BMO.
However, it wasn’t all bad for HSBC, which counted the highest proportion of second-quartile funds in 2018 at 42.9 per cent, closely followed by Vanguard (42.5 per cent) and Royal London (42.1 per cent). Conversely, AXA and Lazard were the fund managers with the least amount of second-quartile funds.
The groups with the highest proportion of third quartile funds were Canada Life, Lazard, UBS, Sarasin and Aviva Investors.
Meanwhile, at the other end, Artemis and Liontrust had the least amount of third-quartile funds in the first seven months of 2018.
Finally, we looked at those fund managers that had the largest proportion of funds in the bottom quartile so far this year.
The fund manager with the largest proportion of bottom-quartile performers was Old Mutual with 12/27 funds (44.4 per cent) falling in the bottom bracket.
Source: FE Analytics
Old Mutual Pacific Equity was the worst performer here with a loss of 9.15 per cent, while Old Mutual Global Emerging Markets and Old Mutual Asian Equity Income fell more than 5 per cent in the first seven months of the year.
Indeed, emerging markets in general have taken a hit this year thanks to concerns over the trade war, slowing Chinese growth and rising rates in the US, with strategies in the sector struggling to make a positive return.
Barclays, Legg Mason and Quilter Investors also found themselves near the top of the list of groups with the highest proportion of fourth-quartile funds.
Moving to the other end, Vanguard and Baillie Gifford had the least amount of bottom-quartile funds with one fund each.
The funds in questions are the Vanguard UK Inflation-Linked Gilt Index fund, which is down 1.25 per cent compared to the average IA UK Index Linked Gilts fund’s loss of 0.89 per cent, and Baillie Gifford Emerging Markets Bond, which is down 4.38 per cent compared to the average IA Global Emerging Markets Bond peer’s 2.31 per cent loss.
Royal London, Margetts and Canada Life were the only other fund groups to have less than 10 per cent of their funds in the bottom quartile so far this year.