When it comes to investing in actively managed funds as opposed to automated index trackers, we have long argued that it is important to look carefully at the career track record of the fund manager in charge and understand their approach to investing. Fund management is a competitive, well paid industry, so inevitably managers change jobs from time to time. We look at track records across the firms they have worked at throughout their career.
Yet fund managers with really long track records managing funds in the same sector are few and far between. Weaker managers get weeded out of the industry while others get promoted and move into the senior management roles at their firms and give up running portfolios themselves. Some fund managers will move into roles where they manage investments for institutions or wealthy individuals rather than the wider investing public, others leave the industry.
In compiling our recent Top 100 Fund Managers guide, which analysed the career track records of equity fund managers to identify those who have had the greatest past success, we found 69 individuals or teams with identifiable records in their sectors of more than 15 years and only 30 with records of more than 20 years. That’s tiny when you consider the thousands of funds available, so this length of experience is a rare commodity.
Experience is a good thing and it’s statistically the case that the more data you have, the more reliable the insights you can gain. However before investing with a veteran fund manager it is still important to weigh up whether they remain hungry to succeed and also to assess whether past success has resulted in them managing too much money, which in some cases may affect the way they invest. These are the sorts of insights our research team try to achieve through regular meetings with fund managers.
Veteran investors who manage funds that we continue to rate highly include Nigel Thomas, manager of the five-star rated AXA Framlington UK Select Opportunities fund and Richard Buxton, manager of the four-star Old Mutual UK Alpha fund, who respectively have 27 and 18-year track records running funds in the UK All Companies sector.
In the popular UK Equity Income sector, two experienced hands stand out: Neil Woodford, manager of the three-star CF Woodford Equity Income fund and Adrian Frost, manager of the three-star Artemis Income fund, both of whom have 26 year track records in the sector.
Further afield, stalwarts of the Asian markets whose funds we continue to rate highly are Angus Tulloch, manager of the five-star rated First State Asia Pacific Leaders fund Matthew Dobbs, manager of the Schroder Asian Alpha Plus fund, who respectively have 26 and 9-year track records managing funds in the Asia Pacific region (excluding Japan). When it comes the Japanese stock market, Stephen Harker, manager of the five-star GLG Japan Core Alpha fund, has almost 20 years’ experience under his belt.
And finally when it comes to navigating the European markets, John Bennett, manager of the four-star Henderson European Focus fund has 19 years’ experience running funds that invest in Europe including the UK and almost 10 years running funds focused on Europe excluding the UK.