The two boutique groups were by far the best-performing investment houses of the year, topping the standings for average relative return, average quartile, and average max loss, as well as percentage of funds that beat their benchmark.
Troy arguably pips Liontrust to the post, with all four of its funds achieving top-quartile status over the 12-month period. The £1.6bn Trojan fund was the only Balanced Managed fund to beat inflation last year, while both Trojan Income and Trojan Capital were top-five performers in their respective sectors.
However, the group’s limited range gives it an advantage over its slightly larger rival.
Best-performing investment houses of 2011
| Group |
No. of funds |
Funds that beat benchmark (%) |
Average quartile |
Average relative return (%) |
Average max loss (%) |
| Liontrust Fund Partners |
7 |
100 |
1.6 |
7.9 |
-11.1 |
| Troy Asset Management |
4 |
100 |
1 |
11.0 |
-5.4 |
| First State Investments |
12 |
80 |
1.7 |
5.2 |
-18.4 |
| Cazenove Fund Management |
22 |
76 |
2.0 |
3.8 |
-8.7 |
| Baillie Gifford |
22 |
76 |
1.7 |
2.6 |
-10.1 |
Source: FE Analytics
While Troy scored highly on all four performance measures, its relative return is particularly impressive; the average fund delivered 11 per cent more than its benchmark over the period. FE Alpha Managers Francis Brooke and Sebastian Lyon were both defensively positioned throughout the year, which gave them a significant advantage over the vast majority of their rivals.
Speaking to FE Trustnet in November, Brooke said his Trojan Income portfolio targets companies that can grow their dividend and achieve good capital growth no matter the market condition. The manager says he expects equity markets to be turbulent for the foreseeable future.
The group also has a far superior average max loss compared with Liontrust, though it should be noted that three of the group’s four funds are multi-asset products, which generally fared better than pure equity funds during last year’s market turmoil. In contrast, only one Liontrust fund – Liontrust European Absolute Return – invests a large portion of its portfolio in lower-risk assets such as bonds and cash.
Julian Fosh’s Liontrust Special Situations fund is the firm's standout performer, topping its UK All Companies sector with returns of 7.54 per cent in 2011.
Performance of fund vs sector and benchmark in 2011
Source: FE Analytics
The manager says the fund’s outperformance stemmed from successful active stock-picking in both the large and small cap market. He highlighted Rightmove, Aggreko, GlaxoSmithKline and Royal Dutch Shell as four stocks that did particularly well.
Like Brooke, Fosh believes 2012 will be a difficult environment for equity investors, particularly in the UK. As a result, he says the portfolio will retain its underweight position in UK retail banks, and continue to target internationally focused companies.
Cazenove, Baillie Gifford and First State are the pick of the larger groups, with more than three-quarters of their funds beating their benchmark over the period. While First State’s emerging market bias led to a high maximum loss, the likes of First State Asia Pacific Leaders and First State Global Emerging Market Leaders protected against the downside far more effectively than their peer group.