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Who won & lost in a dramatic year for UK All Companies funds
by Robert St George on Apr 11, 2014 at 14:35
Citywire Discovery reveals the winners and losers after a year of big change in the UK All Companies sector, which saw one of its stars, Richard Buxton, change jobs.
It has been a year of consolidation in the funds industry, but through that period the giant UK All Companies sector has actually become more diffuse.
A year ago, the top 10 managers in this category controlled 42% of all the assets in the space. Now that has been whittled down to 38%. This has been achieved despite the number of managers in the sector slipping from 216 to 202.
A good deal of the reallocation is attributable to one of last year’s biggest stories: Citywire AA-rated Richard Buxton’s switch from Schroders to Old Mutual, and the subsequent acquisition of Cazenove by Schroders.
This has sent Buxton’s (pictured) market share plunging from 5.9% across four mandates a year ago to 1.3% over two portfolios in the sector now. Conversely, AAA-rated Julie Dean has taken her market share from 1.9% 12 months ago to 3.4% at the moment – although that ascent may be capped for now given Schroders’ willingness to manage the capacity of her strategies. Buxton, meanwhile, has proved an asset magnet: Old Mutual UK Alpha has swelled, albeit from a low base, by more than £1 billion over the past year.
The other significant redistribution among the peer group has come courtesy of Tom Dobell. As the chart above shows, Dobell’s performance over the long term remains decent but on a three-year view he has dropped into the bottom decile.
It’s therefore no surprise that his market share has slipped from 11.8% a year ago to 9.4% at present. Perhaps more surprising is that despite this he has held onto the top position in the sector; his nearest competitor by market share is AA-rated Nigel Thomas at AXA with 6.4%. That gap of three percentage points between them is worth £2.3 billion.
Also worthy of mention is AAA-rated Martin Walker, who has increased his market share over the past year from 2.1% to 2.6% despite all the commotion around him in both the sector and his Henley home at Invesco Perpetual.
Top decile through the past decade and second decile over three years, he has also outperformed both of his more celebrated equity income colleagues. On a three-year basis he has returned 74.3%, compared with AAA-rated Mark Barnett’s 64.7% and A-rated Neil Woodford’s 51.1%.
The analysis comes from Citywire Discovery, a new desktop system that allows fund buyers and fund groups to access track records of over 9,000 managers tracked by Citywire. It provides unique insights into peer group analysis, performance comparisons and competitor analysis. For more details contact firstname.lastname@example.org
Julie Dean, Schroder UK Opportunities
AAA-rated Julie Dean dominates the crucial top-right corner of the performance chart on the previous slide, a factor of her top-decile performance over the past decade and – even more impressively – top-percentile numbers since 2011.
Whether Dean can hold that corner over the next three years will depend on some of her big bets paying off. She has populated her £2.8 billion portfolio with unloved and relatively high-risk stocks: her top three positions (Rio Tinto, Royal Dutch Shell and Legal & General) account for 16.5% of the fund.
Dean has been punished for this bravery of late. Over the past three months she has slumped to the sector’s bottom decile.
That followed flows of £900 million into the fund during the third quarter of last year, prompting Schroders to commit to manage its capacity ‘very tightly’. The fund currently holds 6.9% – or £193 million, more than the entirety of A-rated Paul Mumford’s Cavendish Opportunities fund – in cash.
Three-year total return: 77.6%
Tom Dobell, M&G Recovery
From the best to the biggest: despite a torrid run Tom Dobell still manages the sector’s largest fund, the £7.2 billion M&G Recovery.
While its problems over the past three years are well known, it has quietly achieved something of a recovery of its own over the past three months: from a bottom-decile record in the former timeframe, it has climbed above the sector average – and just outside the top quartile – in the latter.
Dobell has been buoyed by strong recent showings from the likes of top holding easyJet, up 17% so far this year while the FTSE 100 has dropped 2%.
This was presaged by Dobell ending 2013 in a particularly ebullient mood: he promised to ‘battle on’, said he was seeing ‘more potential investment opportunities than we can shake a stick at’, and declared his intention to return Recovery to ‘where it belongs at the top of the tables’.
He should at least be supported in keeping it at the top of the size rankings by its recent inclusion on the Hargreaves Lansdown Wealth 150+ list.
Three-year total return: 20%
Karen Robertson, Standard Life Investments UK Equity General & UK Equity Growth
It has also been a tough few years for + rated Karen Robertson at Standard Life Investments. Both of her funds in this sector are now below average over three and five years.
This has cost Robertson some market share, but not as much as might have been expected. She still commands a top 10 position among the peer group, although her market share has slipped from 2.4% a year ago to 2% now.
And unlike Dobell, Robertson will not be able to count on any performance bounce in the foreseeable future to prevent this from falling further: both funds are still below average on a three-month view.
As a group, though, Standard Life Investments does have a standout product in this space: AA-rated Ed Legget’s £1.1 billion UK Equity Unconstrained fund. This is a top-decile performer over the past three years, and the sector’s absolute best over five years. This has propelled Legget up the market share rankings, from 0.9% a year ago to 1.5% now.
Three-year total return: 28.2%
Nigel Thomas, AXA Framlington UK Select Opportunities
AXA’s stalwart Nigel Thomas, AA rated by Citywire, has successfully traded on his top-decile 10-year numbers to climb from third to second place by market share in this sector over the past year. He now runs 6.4% of the assets in the category, compared with 5.8% a year ago.
Yet his three-year record, while still decent, has slipped out of the first quartile; it is also second quartile over one year and over three months.
As with Dobell, however, any adverse effect that dip could have on flows should be offset by the fund’s inclusion on the Hargreaves Lansdown Wealth 150 list – although not the + version. The other two Hargreaves Lansdown 150+ picks are AAA-rated Nick Train’s Lindsell Train UK Equity and AA-rated Richard Buxton’s Old Mutual UK Alpha funds.
Three-year total return: 47.7%
More about this:
Look up the funds
- Old Mutual UK Alpha R Acc
- Cazenove UK Opportunities B Acc
- Cavendish Opportunities A GBP Inc
- M&G Recovery I Inc
- Standard Life Inv UK Equity General Inc
- Standard Life Inv UK Equity Growth Inst Acc
- Standard Life Inv UK Equity Unconstrained Inst
- AXA Framlington UK Select Opportunities R Inc
- CF Lindsell Train UK Equity Acc
Look up the shares
- easyJet plc (EZJ.L)
- Rio Tinto PLC (RIO.L)
- Royal Dutch Shell PLC (RDSa.L)
- Legal & General Group PLC (LGEN.L)
Look up the fund managers
- Richard Buxton
- Julie Dean
- Tom Dobell
- Nigel Thomas
- Martin Walker
- Mark Barnett
- Neil Woodford
- Paul Mumford
- Karen Robertson
- Edward Legget
- Nick Train