However, the majority of fund managers say they take a long-term outlook on markets, often five years or more, but that investors are quick to judge them even if they underperform over a period as short as one year.
It may not seem fair given that many funds have a stated objective of generating long-term outperformance against a particular benchmark, but if they sit in the bottom quartile over one or two years, questions begin to be asked about the manager's ability to manage money.
Rob Morgan (pictured), pensions and investment analyst at Charles Stanley Direct, says this is a problem in the industry and he urges investors to look at the bigger picture before they point the finger.
"I do think that investors can often be too short-termist," he said. "You can be caught out focusing on a fund’s one- or two year-performance, but probably you need to see at least a full cycle or even more than one full cycle before you can judge a manager – so you are looking over at least five years."
"Having said that, if the environment is more suited to a manager’s style but he is still underperforming for one reason or another then that is when you have to be wary. But just taking their short-term numbers at face value and making a decision is far too simplistic," he added.
One of the managers who has attracted a lot of criticism recently is Sebastian Lyon.
Lyon has kept a very defensive portfolio, geared for higher inflation, because he feels it is the only outcome from the vast amount of stimulus the world's central banks are pumping into the financial system.
He holds just 35 per cent in equities in his Trojan fund, with 28 per cent in index-linked government bonds, 11 per cent in gold bullion and 17 per cent in cash. However, while he has remained cautious, markets have surged.
According to FE Analytics, over one year his £2.5bn Trojan fund has lost money while the IMA Flexible Investment sector and the FTSE All Share – which is the fund’s benchmark – have returned 13.08 per cent and 17.82 per cent, respectively.
Performance of fund vs sector and index over one year
Source: FE Analytics
In truth, Lyon has not just underperformed over 12 months. The fund is also bottom quartile over three years and while it has beaten the sector over five and 10 years, it has fallen short of its benchmark over both of these periods, as well as over three years.
It would be quite easy, given those figures, to write off the Trojan fund. However, its performance since its launch in May 2001 paints an entirely different picture.
Over that period of time it is the second-best performer in the sector, with returns of 157.94 per cent, beating the FTSE All Share by close to 70 percentage points.
Performance of fund vs sector and index since May 2001
Source: FE Analytics
Morgan says he is sticking with Lyon because of his long-term performance and that investors should realise what the manager is trying to do.
"This is not the sort of environment you would expect him to perform well in, but it has been his position in gold that has been the major reason why he has underperformed," he said.
"Even the parts of the fund that have done well have been underpinned by his gold position. It is just that his way of thinking hasn’t chimed with the market recently, as the places to be have been areas such as UK small caps and financials, basically more cyclical stocks."
"Hopefully investors put it into the context that it is a fund that will act as a diversifier."
"I hold the fund myself and I am not worried about its recent performance, because he is a quality manager who I believe can add value over time. Also, it should be there for me when everything else I hold isn’t working."
Time will tell if Lyon is able to replicate his past numbers; however there have been plenty of times in the past where a manager has come under pressure for their relative poor performance before going on to deliver superior long-term returns.
One of the best examples is Neil Woodford. Although he is commonly regarded as one of the best managers in the business, he was heavily criticised when he held nothing in tech stocks in the run-up to the dotcom bubble.
Between January 1998 and January 2000, Woodford’s Invesco Perpetual High Income fund had returned 19.29 per cent to the FTSE All Share’s 41.31 per cent and the IMA UK Equity Income sector’s 26.36 per cent.
However, those who wrote him off then were left looking a bit foolish: since January 2000, the fund has returned 278.88 per cent, eclipsing the returns of both the sector and index.
Performance of fund vs sector and index since 2000
Source: FE Analytics
Morgan says that Anthony Bolton also took a lot of stick during his time as manager of Fidelity Special Situations, despite the fact it returned more than 14,500 per cent while he was there.
"While Woodford is the classic case, Anthony Bolton is another example," he said.
"He is often cited as one of the greatest managers and he has been very well written about, but people often forget that there were long periods where he underperformed. He did seem to consistently add value, but that outperformance could come in stops and starts."
Morgan says there are also examples of managers who came under so much pressure following a period of short-term underperformance that they left their role.
"Another one who actually did leave his fund because of underperformance was Tim Russell, who was managing the Cazenove UK Absolute Target fund," Morgan said.
"He was extremely bearish on miners for the same reason that most people are extremely bearish on them today, but he was bearish on them when they were absolutely on fire."
"He kept shorting them in his absolute return fund and just ignored them in his long-only fund. The point being that he stuck to his guns for too long, but fast-forward a few years and it would have been the right decision."
During his time as manager of Cazenove UK Absolute Target, between the summers of 2008 and 2011, Russell’s portfolio made just 3.4 per cent to the IMA Targeted Absolute Return sector’s 10.87 per cent.
Performance of fund vs sector between July 2008 and June 2011
Source: FE Analytics
Morgan says that because Russell was trying to protect investors’ money, the relatively short-term criticism was fully justified.
"He was too dogmatic: when you are running an absolute return fund you have to be more flexible. But he stuck to his guns and it carried on losing him money," he said.
"This wouldn’t have been so much of a problem if it wasn’t an absolute return fund, but as he was promising to target a small incremental return each year and the fund kept losing money, it was a complete disaster."
"Saying that, if he was still running money today then that decision would have made him money," he added.