Well-known UK equity funds run by groups such as Lindsell Train, Liontrust
Giant funds are often said to struggle to replicate the good performance they achieved in their formative years, but over the next few
The funds that will appear in this series all manage over £1bn in assets and have produced top quartile returns over one-, three-, five- and 10-year periods.
First up is the IA UK All Companies sector, which is the largest in the Investment Association universe and one of the most closely watched peer groups.
LF Lindsell Train UK Equity
LF Lindsell Train UK Equity is a £4.8bn fund run by FE Alpha Manager Nick Train.
It launched in 2007 and has returned 291.13
Performance of fund vs sector and benchmark over multiple time frames
Source: FE Analytics
In a recent update to investors, Train said: “We now have circa 5.5
“At the start of the year, I might have hesitated about where to aggressively deploy 5
“Today I’m not saying there aren’t new ideas that could be introduced to the portfolio, but I am saying that many existing holdings are looking compelling value to us again.”
Performance of fund vs sector and benchmark over 10yrs
Source: FE Analytics
Top 10 holdings include Unilever, Diageo, RELX, London Stock Exchange, Hargreaves Lansdown and Burberry.
With many large-cap holdings in the fund, LF Lindsell Train UK Equity has ridden market volatility well over the years and has the sector’s
The fund has a five FE Crown Rating and an ongoing charges figure (OCF) of 0.70
Liontrust Special Situations
The second fund that is in the peer group’s top quartile
Managed by Anthony Cross since its launch in 2005, the fund now counts Julian Fosh as a co-manager, with both managers receiving an FE Alpha Manager rating.
Liontrust Special Situations has posted double-digit returns across one-, three-, five-year periods and triple-digit returns over 10 years.
Performance of fund vs sector and benchmark over multiple time frames
Source: FE Analytics
The investment approach focuses on companies that have a competitive edge that can sustain higher than average returns over a long period of time.
In order to achieve this, the managers believe that a company must have at least one of the following characteristics: intellectual property, strong distribution networks
Over 10 years, Cross and Fosh and have produced the second highest alpha score in the UK All Companies sector.
Square Mile Investment Consulting and Research, which gives the fund an ‘AA’ rating, said: “What is clear here is that the team operate with a disciplined adherence to their investment process where the managers are fully prepared to exit those companies that lose their idiosyncratic advantage or fail to translate it into superior returns.
“Nevertheless, the thoroughness of the approach and experience of the team mean that turnover in any given year tends to be on the low side.”
Performance of fund vs sector and benchmark over 10yrs
Source: FE Analytics
The portfolio normally consists of 50 or so stocks and counts GlaxoSmithKline, Unilever, BP, Compass Group, Royal Dutch Shell B and Diageo as its top holdings.
Liontrust Special Situations has a five FE Crown Rating and an OCF of 0.86
Old Mutual UK Mid Cap
The final IA UK All Companies fund that FE Trustnet will be looking at today is the £3.5bn Old Mutual UK Mid Cap fund, which launched in 2002 and holds five FE Crowns.
The current manager, Richard Watts, has been at the helm since 2008.
Old Mutual UK Mid Cap has more than doubled its peer group’s returns over three, five and 10 years while also beating the benchmark considerably over the same periods.
Performance of fund vs sector and benchmark over multiple time frames
Source: FE Analytics
Square Mile said: “The process employed is not immune to short-term periods of more variable returns, but overall we view this as a compelling strategy providing investors with access to a portfolio of
FE Alpha Manager Watts works with the OMGI UK small and mid-cap team in a collegial approach where each fund manager is assigned a different sector to cover
Square Mile said of Watts: “He encountered a challenging start to his fund management career primarily due to the team underestimating the strength of the recovery in the UK (and global markets) in the aftermath of the global financial crisis.
“However, in the subsequent
Performance of fund vs sector and benchmark over 10yrs
Source: FE Analytics
While focusing on a
As you would expect from a mid-cap fund the performance does not come without volatility, which ranks as some of the highest in the IA UK All Companies sector over the past decade. However, this is not without merit as the fund has produced the sixth best Sharpe ratio in the sector.
The fund consists of roughly 50 stocks, of which Ascential, Boohoo, SSP Group, Fevertree Drinks and Ashtead Group are the largest holdings.
Old Mutual UK Mid Cap has an OCF of 0.85.