Returns can be measured in more than one way, with different metrics providing different insights into a fund’s performance pattern.
Rolling returns are often used to assess the consistency of a fund’s performance so in this series, Trustnet will be looking at Investment Association funds through the lens of three-year rolling returns.
We measured each fund’s three-year performance quartile in each month from 2013 to 2023, resulting in 120 overlapping cycles, and then calculated how frequently (in percentage terms) a fund was included in the first quartile.
For this study, we only included funds that had a track record going all the way back to 2010 and were in the top performance quartile 70% or more of the time.
We begin with the IA UK All Companies sector, where the funds on a roll were mainly focused on small-caps, value and sustainability themes.
Source: FE Analytics
The list opens with IFSL Marlborough Special Situations, a £874.6m portfolio co-led by FE fundinfo Alpha Manager Eustace Santa Barbara. It invests in smaller companies, new issues and companies going through a difficult period with recovery prospects.
The fund has maintained a first-quartile performance 91.7% of the time and features in FundCalibre’s Elite list for its “exemplary” long-term track record alongside the “richly deserved reputation as astute stock pickers” of the Hargreave Hale team behind the strategy.
It is closely followed by the Royal London Sustainable Leaders Trust, which focuses on environmental, sustainability and governance (ESG) themes and remained in the first quartile of its peers 89.2% of the time.
The five FE fundinfo Crown-rated fund is co-run by Alpha Manager Mike Fox, who was praised by FE Investments analysts for his stock-picking abilities and preference for technology and industrial companies.
“Due to its investment style and performance being heavily influenced by the sustainability process, the fund can perform differently to its peers, which are not constrained and may underperform when cyclically-orientated, controversial sectors such as mining, energy and tobacco lead the market,” they said.
“However, despite several periods of outperformance of cyclical sectors, the fund continues to beat its peers and the wider market over the long term.”
A few positions behind, Premier Miton Responsible UK Equity was another ESG strategy that was able to maintain a top-quartile position 77.5% of the time.
The top three closes with a tie between Slater Growth and LF Lindsell Train UK Equity, both of which spent 81.7% of the three-year periods we reviewed in the first performance quartile of their peers.
The former, like the Marlborough fund, is biased towards micro-, small- and mid-caps, with a growth-at-a-reasonable-price approach.
Veteran manager Mark Slater focuses on quality-growth companies with dependable revenue streams, from which FE Investments analysts expect “a structural bias away from the more cyclical parts of the market such as banks, energy and mining, resulting in a lower beta to the market”.
Another Slater fund made it to the list, the £387m Slater Recovery fund.
Nick Train’s Lindsell Train UK Equity and Liontrust Special Situations, which appears at the foot of the table, constitute the only two large-cap funds in the list.
Finally, in fourth and last position, are two Jupiter funds: UK Dynamic Equity and UK Mid Cap.
With £125.2m of AUM and a 1.17% ongoing charge figure (OCF), the former is smaller and more expensive than the more popular UK Mid Cap, but was more persistent in maintaining its first- quartile ranking.
It is focuses on UK equities outside the FTSE 100 index and is skewed towards industrials, financials and consumer discretionary stocks.