The award was presented to the manager at London’s The Shard last week in a ceremony intended to recognise the very best the active fund management industry has to offer investors. Some 15 awards were handed to fund managers rated highly by the FE Research team.
Woolnough (pictured) runs the flagship £24.6bn M&G Optimal Income fund, as well as the £5.3bn M&G Corporate Bond and the £5bn M&G Strategic Corporate Bond funds, and was also named Fixed Interest Manager of the Year.
The FE Research team says the manager’s ability to consistently add value over the market cycle on both absolute and relative points of view are key factors behind both of his wins in the awards.
M&G Optimal Income is the best performing fund in the IA Sterling Strategic Bond sector since launch in December 2006, with a total return of 90.94 per cent. Its average peer has returned about half that over the same time frame.
Performance of fund vs sector since launch
Source: FE Analytics
The fund’s credentials are just as impressive when examined through other metrics. FE Analytics shows its Sharpe ratio – which is a measure of risk-adjusted performance – since launch is the highest in the peer group at 0.77, while it’s top quartile when it comes to annualised volatility, maximum drawdown, Sortino ratio, Treynor ratio and alpha generation.
M&G Optimal Income is designed to capture the most attractive income stream at any point of the economic cycle and Woolnough has flexibility to invest in government bond, investment grade corporate bond, high yield, derivative and equity markets, depending on his views.
The fund also appears on the FE Research team’s Select 100 list of preferred funds and is well respected by investment analyst community, holding for example an AA rating from Square Mile Investment Research & Consulting.
Rob Gleeson, head of FE Research, said: “The FE Alpha Manager awards try to identify which managers are capable of adding value to their portfolios over time regardless of market conditions.”
“Of the 2,000 plus managers on the FE database, Richard Woolnough ranks number one and has done for some time. No other manager has been able to demonstrate the same consistency, adding 1 or 2 per cent to his funds repeatedly year after year.”
Fund managers investing across the asset classes were recognised in the inaugural FE Alpha Manager of the Year awards.
Anthony Cross and Julian Fosh of the Liontrust Special Situations fund won the UK equities category. Their five FE Crown-rated fund, which combines the best ideas of the managers’ Liontrust UK Smaller Companies and Liontrust UK Growth funds, has made a first decile return of 115.73 per cent over five years.
The FE Research team says the fund is “one of the best available in the UK All Companies sector”, highlights it as a strong contender for a core holding in any investor’s portfolio.
Old Mutual UK Smaller Companies’ Daniel Nickols took home the award for best smaller companies manager. Over 10 years the fund is the third best in its sector with a 240.40 per cent return while its Sharpe ratio since Nickols took over in January 2004 is the fourth best.
Gordon Grender was named best US equity manager for his performance on GAM North American Growth, which has returned a staggering 3,355 per cent since launch in January 1985. Grender is one of the most experienced investors in the market and has a rigorous process that focuses on under-researched firms.
Performance of fund vs sector over 20yrs
Source: FE Analytics
Henderson European Focus manager John Bennett triumphed in the European equities group. His five crown-rated fund has no defined investment style but Bennett’s strong belief in mean reversion means that his ideas are often contrarian as he looks to areas ignored by other investors.
David Gait of First State Global Emerging Markets Sustainability took home the emerging markets gong. His soft-closed fund focuses on stocks that benefit from and contribute to the sustainable development of the countries in which they operate.
When it comes to global equities, GAM Global Diversified’s Andrew C Green won the award. Green is another extremely experienced manager – he’s one of the longest serving in the global equity space – and has made his investors about 600 per cent over the past 20 years.
Chris Taylor, manager of the Neptune Japan Opportunities fund, was crowned best Japanese equity manager. The fund is entirely built around Taylor’s macroeconomic view and his belief that the yen needs to depreciate significantly, meaning it is well positioned should the country’s ambitious stimulus package prove successful.
Will James’ track record on the Standard Life European Equity Income fund led to him being declared equity income manager of the year. The fund aims to provide a sustainable income higher than the European market average, along with capital growth, and James has achieved that aim, paying out almost £3,500 on a £10,000 investment at launch in April 2009.
Victor Wood of McInroy & Wood was topped the multi-asset category, recognising that the manager has achieved better risk-adjusted returns than his average peer while being less volatile and posting a smaller maximum drawdown.
The FE Alpha Manager awards also looked beyond asset classes to recognise excellence in other areas.
Mark Martin, manager of the Neptune UK Mid Cap fund, was singled out as the best high conviction manager. He has more than half of his fund in just 10 names, boasts an active share of more than 95 per cent and has returned almost 300 per cent since inception.
CF Ruffer Total Return managers Steve Russell and David Ballance were jointly awarded the title of best fund manager in a bear market. Their fund tops the IA Mixed Investment 20%-60% Shares sector when it comes to metrics such as Sharpe, Sortino and Treynor ratios, as well as maximum drawdown and volatility. The strength in down markets is highlighted by 2008, when CF Ruffer Total Return made 20.86 per cent and its average peer lost 15.84 per cent.
Best manager in a bull market went to Marlborough Special Situations manager Giles Hargreave. Marlborough Special Situations is the best returning fund since the FTSE’s 1999 high, posting gains of just under 600 per cent.
Performance of fund vs sector since 30 Dec 1999
Source: FE Analytics
Natixis Loomis Sayles Multi Sector Income fund manager Matthew Eagan has just achieved FE Alpha Manager status and walked away from the ceremony with the best newcomer award. Eagan’s performance last year was especially strong, after his fund made a 2.19 per cent gain while its average IA Global Bonds peer lost money.
FE Alpha Manager ratings are awarded to the top 10 per cent of managers running funds for UK retail investors, based on risk-adjusted alpha, with track record length bias; consistent outperformance of a benchmark overall; and outperformance in both up and down markets.
Gleeson added: “The purpose of the Alpha Manager rating is to take a step back and remove short-term market movements or cyclical factors from the analysis. It allows us to identify the managers who can add value over time.”