The premier league: the top 10 selling funds in 2014
10- Fundsmith Equity: £458 million
Terry Smith promised to take on the ‘fat and complacent’ asset management industry and although many were sceptical, he has delivered on his word.
Smith’s concentrated, low turnover approach has paid off with the fund up 56.5% over the three years to the end of July, more than the double the sector average return of 24.8%.
Since launch in November 2010, the fund has grown to £2.2 billion in size.
9- Royal London UK Equity Income: £495 million
The Royal London UK Equity Income fund has been one of the big winners of the fallout from Neil Woodford leaving Invesco Perpetual earlier this year.
As investors have looked for alternative managers, RLAM’s AA-rated Martin Colwill has come onto many people’s radars.
The consistency of his risk-adjusted returns have seen him retain a Citywire rating solidly for three straight years and over that period his fund has delivered a 82.4% return, versus a 56.9% sector average.
The fund has now grown to £1.4 billion in size
8- Threadneedle Global Equity Income: £523 million
The hunt for yield has increasingly seen investors look further afield with global equity income funds one of the major beneficiaries of this trend.
Threadneedle’s Global Equity Income fund is one of the older and more established vehicles in the sector. Although manager Stephen Thornber’s value-biased approach has actually lagged the sector over both one and three years, it is still ahead of the peer group over five years and is seen as a solid, steady performer.
The fund, which has now grown to £1.4 billion in size, has returned 42.8% over three years, compared to the sector average return of 42.8%.
7- Newton Real Return: £566 million
Although Newton argue the fund is not an absolute return vehicle, it is often seen as such, particularly as it sits in the IMA’s Targeted Absolute Return Sector.
Managed by + rated Iain Stewart, the £9.1 billion portfolio has lagged over one year but is up 16% over three years, compared to 11.5% from its peer group.
Stewart has long been adopting a cautious approach just over 20% in cash and equivalents and a 2018 Treasury note as his top holding.
6- GLG Strategic Bond: £575 million
The fund is the newest in the top 10, having only been launched in November 2011. That said, it has got off to a strong start and is up 10.6% over the last year, compared to a sector average return of 7.9%.
It is managed by Jon Mawby and Andy Li, who both used to work at Wells Fargo-owned ECM Asset Management.
The fund, which is now £788.2 million in size, has a running yield of 4.8%, making it attractive to income-hungry investors.
5- Henderson UK Property: £580 million
Property as an asset class has been steadily coming back into favour with investors with two bricks and mortar funds making the list of top 10 best-sellers list.
The £2.2 billion Henderson UK Property fund is managed by Marcus Langlands Pearse and Ainslie McLennan. Performance-wise it is line with the peer group over one year, lags over three and is marginally ahead over five years. That said, the mish-mash of funds in the sector makes meaningful comparisons difficult.
The fund is currently 88% invested in bricks and mortar with a 12% cash buffer and has a historic yield of 3.8%.
4- M&G Property Portfolio: £634 million
The £3.2 billion fund, managed by Fiona Rowley, has seen strong inflows as investors look to diversify out of equity income in the hunt for yield.
Similarly to the Henderson UK Property fund, the fund has a mixed record against the peer group, given the distortive effect of property share funds.
However, the fund, which is currently skewed towards offices and the Southeast, is up 12.4% over the last year versus the peer group’s 12.4% and 17.1% over three years against 28.1%.
The fund has a cash buffer of 14.1% and is more coy about disclosing its historic yield.
3- Standard Life Investments Gars: £872 million
SLI’s £20.8 billion Global Absolute Return Strategies (Gars) juggernaut continues to pull in assets but lost its crown as the biggest UK retail fund to Richard Woolnough’s M&G Optimal Income earlier this year.
But the highly diversified fund remains a big draw and its performance track record is strong. It is up 7.1% over one year, almost doubling the sector average return of 3.8%, while over three years it is up 22.6% against the peer group’s 11.5%.
However, it may struggle to beat its target of 5% above cash per year over rolling three year periods, being up 1.1% year to date, but the group remains upbeat confident in the portfolio’s positioning.
Some of the personnel behind the fund may have changed, following raids by Invesco Perpetual and Aviva Investors, as its rivals look to get in on the action, but this has not deterred investors.
2- CF Woodford Equity Income: £2.6 billion
The launch of Neil Woodford’s eponymous asset management company has attracted reams of press and bucketloads of cash.
In what is a massive jump from third to second place in the list of top-sellers, Woodford’s fund pulled in a record £1.6 billion at launch with this figure continuing to grow rapidly.
Investors know what they are getting with the A-rated income veteran and his new, more open approach is proving a hit. Earlier today he revealed that he has just sold out of HSBC after buying the stock just over a year ago- his first foray into banks in more than a decade.
At the end of august the CF Equity Income fund will have three month performance figures, but it remains too early to compare his numbers against those of Mark Barnett, who replaced him on the Invesco Perpetual mandates that he formerly ran.
1- M&G Optimal Income: £4.6 billion
Richard Woolnough is now running £32.5 billion across his three retail fixed income funds. His flagship £22.3 billion Optimal Income became the UK’s largest retail fund earlier this year as it overtook SLI’s Gars and judging by the comparative inflows, the gap in assets is set to keep widening.
M&G moved to soft close his Corporate Bond and Strategic Corporate Bond funds in July 2012 after Woolnough complained that the volume of inflows was making it harder for him to maintain his strategy. That move seems to pushed more investors towards his Optimal Income fund, which has remained open owing to its more liquid strategy and wider investment universe.
While people will no doubt wonder if he can maintain the performance profile of the fund given its size, he remains ahead of the pack over one and three years, albeit second rather than top quartile.
Over three years the fund is up 24.7% compared to a sector average of 22.8%.