However, a growing number of established top-performing funds have been forced to soft-close because the manager’s investment strategy has been put at risk by the huge amount of inflows.
Recently, there have also been a number of instances where funds that still have a reasonably short track record have soft-closed (such as CF Miton UK Multi Cap Income) or funds have closed at a smaller size than others in their sector (such as Fidelity UK Smaller Companies).
With this in mind, FE Trustnet highlights the top-performing funds that are unknown to the majority of investors.
All of them have only been launched in the past three years and as a result are not yet eligible for an FE Crown Rating.
Marlborough Multi Cap Income
Although FE Alpha Manager Giles Hargreave is a named manager on the Marlborough Multi Cap Income fund, the day-to-day running is left to Siddarth Chand Lall.
According to FE Analytics, it has been the best-performing portfolio in the IMA UK Equity Income sector since its launch in July 2011 with returns of 68.49 per cent, beating the sector average by more than 30 percentage points. It also boasts the highest returns in the sector over the last 12 months.
Performance of fund vs sector since July 2011
Source: FE Analytics
It yields 3.63 per cent and although it is a multi cap income fund, Chand-Lall holds just 8 per cent of his portfolio in mega and large caps. Instead he favours the lower end of the market, with small and micro caps making up more than 60 per cent of the fund.
Investors may not have much time to gain access to the now £657m Marlborough Multi Cap Income fund, given the fact that the similar CF Miton UK Multi Cap Income began to stem flows at a much smaller size last year.
It has an ongoing charges figure (OCF) of 1.55 per cent and requires a minimum investment of £1,000.
MFM Slater Income
MFM Slater Income was launched in September 2011 and is headed up by FE Alpha Manager Mark Slater, who has built up a good longer term track record running the MFM Slater Growth and MFM Slater Recovery funds.
Since its inception, the nimble £37m fund has returned 62.56 per cent while the FTSE All Share has returned 50.22 per cent.
However, the majority of that outperformance – especially relative to its peers – was generated more recently. In 2013 it was a top-decile performer in the IMA UK Equity Income sector with returns of 35.12 per cent.
Performance of fund vs sector and index in 2013
Source: FE Analytics
Although Slater holds popular income-paying stocks such as GlaxoSmithKline in his portfolio, MFM Slater Income has a clear mid cap bias: top-10 holdings include housebuilder Galliford Try, support services group Interserve and home-shopping business N Brown Group – all of which are listed on the FTSE 250.
The fund has a yield of 3.83 per cent and pays out quarterly. The OCF is 1.56 per cent and it requires a minimum investment of £1,000.
Ardevora UK Income
Jeremy Lang, who is best known for running a number of portfolios at Liontrust such as its UK Growth fund, founded Ardevora in January 2010.
He launched his £192m Ardevora UK Income fund with William Pattison in January 2011, meaning it has recently gained a three-year track record. It has been the sector’s fifth best-performing portfolio over this time, with returns of 57.83 per cent.
Performance of fund vs sector since Jan 2011
Source: FE Analytics
It also sits comfortably in the top quartile over one year.
Ardevora UK Income has a yield of 3.3 per cent and is primarily invested in the UK’s large and mega cap market. However, Lang and Pattison aren’t afraid to take punchy stock bets, as they hold just 36 companies.
For instance, their largest position is Britvic which makes up 5.37 per cent of the fund.
It requires a minimum investment of £1,000 and has an annual management charge of 1.5 per cent.
Majedie UK Income
The £228m Majedie UK Income fund was launched in December 2011 and is co-managed by Chris Reid and Yuri Khodjamirian.
Our data shows that over that time is has been the eighth best-performing fund in the sector with returns of 71.57 per cent and has beaten its benchmark – the FTSE All Share – by 30 percentage points.
Performance of fund vs sector and index since Dec 2011
Source: FE Analytics
Majedie UK Income is also a top quartile performer for its alpha generation relative to its benchmark, its Sharpe ratio and information ratio since its launch.
The fund has a similar make-up to longer standing UK equity income portfolios such as Royal London UK Equity Income and Old Mutual UK Equity Income, investing across the FTSE 350. Some of its largest holdings include household UK stocks such as BAE Systems, Aviva and National Grid.
It has a yield of 3.48 per cent and pays out its dividend twice a year.
The fund has an OCF of 1.67 per cent but does have a high minimum investment. Nevertheless, retail investors can gain access to it via a number of fund platforms.
