Lipper Leaders (UK): The 30% Funds Club

Ed Moisson uses the Lipper Leaders scoring system to analyse the best performing funds in 2012 that have five years history.

Nearly £8 billion has been withdrawn by investors in UK equity funds in 2012 and a further £500 million from UK smaller companies funds. So it is perhaps a surprise to find that it is funds in these IMA sectors that dominate the best performers list this year. Indeed 35 of the best performing funds in 2012 (that were launched at least five years ago) invest in UK equities. Evidence, if more were needed, of the difficulties in selecting the right funds at the right time.

All of these ten funds have generated at least a 30% return for their investors in 2012 to the end of November. Cazenove and Standard Life immediately catch one’s eye, each with more than one fund on the list. Cazenove’s Julie Dean manages both the UK Opportunities fund and The Capital Trust (an acquisition from Thornhill), while Ed Legget manages the two Standard Life portfolios.

Looking at the Lipper Leaders scores for these ten funds, Liontrust joins Cazenove in achieving very impressive rankings for their funds’ total return over 5 years, as well as consistent return (risk-adjusted performance relative to their peers), and also for capital preservation (each fund’s ability to minimise losses when compared with other equity funds). Cazenove’s UK Smaller Companies (managed by Paul Marriage and John Warren) and UK Opportunities funds have both achieved the ‘hat trick’ of maximum scores in their Lipper Leaders ratings over the past five years.

It is interesting to see the similar performance profiles of the two Standard Life funds, not only this year, but also historically and including their Lipper Leaders scores. Despite these comparable track records, two striking differences arise when comparing the two funds’ sizes (High Alpha has roughly £50m in assets, while Unconstrained has £500m) and their annual charges (High Alpha has charges of 1.61%, while Unconstrained charges a heftier 1.90%). The latter fund has a more concentrated portfolio (50 stocks) than the former (71 stocks).

This article originally appeared in ‘Investment Life & Pensions Moneyfacts’ (January 2012).