The fund managers that have delivered 1,000% plus returns

A total of five fund managers have produced returns of over 1,000% during their 20 or more years in charge.

Funds and Investment Trusts March 21, 2019 by Tom Bailey

Working as a fund manager is precarious. The average tenure of a fund manager at the helm of one particular fund is just five years. Meanwhile, the median total career tenure for fund managers, taking into account job changes, is a mere seven years.

This presents a potential problem for investors. While most fund managers will have spent a longer time working for a fund as a research analyst or assistant manager, the actual time managers spend at the helm does seem worryingly short, given that investors are encouraged to invest in a fund with a time horizon of at least five years.

This is a problem in a prolonged bull market such as now. The current bull market in US equities recently turned 10 years old. Therefore, in theory, there are fund managers with a decade experience under their belt who have only ever known good times.

However, according to research from AJ Bell, a total of 53 funds have 20-year track record with the same fund manager in charge. Such long tenures, AJ Bell suggests, can help produce higher returns. They note that all of the funds with the same manager at the helm for 20 years have beaten their peer group performance.

According to Laura Suter, personal finance analyst at AJ Bell: “The benefit of investing with a manager who has been running the same fund for two decades or more is that they will have invested through all market cycles, having experienced downturns as well as bull markets.

“These managers will also know their investment markets inside out, they will have been burnt by their past investment errors and will hopefully be wise to these traps in the future, and will know the companies in their sectors inside out.”

Hugh Young is the longest serving fund manager, with 33 years under his belt in running the Aberdeen Standard Asia Pacific & Japan Equity fund. The fund has produced a return of 583% over that period compared to peer group performance of 400%.

At the same time, a total of five fund managers have produced returns of over 1,000% during their 20 or more years in charge. Sven H Borho during his 23 years at Worldwide Healthcare Trust  has produced a return of 1,691.4%, while Matthew Dobbs at Schroder Asia Pacific has returned 1,044%.

The largest return was from Giles Hargreave, with 2,470% over 20 years for his Marlborough Special Situations fund.

However, the relationship between performance and tenure is not so straightforward. It would be too simple to say that longer tenure produces higher performance.

The relationship between the two is more of a chicken and egg conundrum. The tenure of a fund manager may help boost returns compared to rival funds over the same time period (for the reasons outlined above). However, it is also possible that the supposed skill (and ability to produce performance) of a manager compared to his or her peers is what kept him or her in the job for so long in the first place.

At the same time, investors should be cautious about piling into any of the above funds, hoping to see similar returns.

The obvious caveat of past performance not being a guarantee of future performance also applies.

The strong performance of the managers below has been made possible because of their long tenure. However, given the constraints of age and time, many of the managers are unlikely to be at the helm for another two decades. As Suter notes: “Retirement is a real prospect with some managers who have been running portfolios for a long time.”

However, identifying the next crop of managers to rack up such returns and years on the job is not an easy prospect. In 1999 there was no certain way of knowing that Marlborough Special Situations, with Giles Hargeaves at the helm, would return you almost 2,500%.

Fund Tenure Manager 20-year performance (%) Peer group 20-year performance

Aberdeen AsiaPac & JapanEquity

Aberdeen Asia Pacific Equity

Aberdeen New Dawn Investment Trust

33


31


29

  Hugh Young
  

583.1%


885.9%


1,311.2%

400.3%


579.0%


174.7%

Carmignac Patrimoine

  29
  

  Edouard Carmignac
  

  347.2%
  

  163.9%
  

Aberforth Smaller Companies Trust plc
 

  28
  

  Alistair Whyte & Richard Newbery
  

  928.9%
  

  194.5%
  

City of London Investment Trust

  27
  

  Job Curtis
  

  248.8%
  

  78.1%
  

The Mercantile Investment Trust

  25
  

  Martin Hudson
  

  961.4%
  

  92.6%
  

Herald Investment Trust plc

  25
  

  Katie Potts
  

  545.20%
  

  300.3%
  

JPM Emerging Markets Investment Trust

JPM Emerging Markets

25


21

  Austin Forey
  

1,034.1%


721.1%

1,015.8%


541%

Worldwide Healthcare Trust

  23
  

  Sven H Borho
  

  1,691.4%
  

  481.7%
  

Schroder Asia Pacific

  23
  

  Matthew Dobbs
  

  1,044.60%
  

  174.7%
  

Invesco Corporate Bond (UK)

  23
  

  Paul Causer
  

  186.3%
  

  127.3%
  

Standard Life Investments UK Smaller
Companies

  22
  

  Harry Nimmo
  

  995.8%
  

  555.3%
  

Legg Mason IF Japan Equity

  22
  

  Hideo Shiozumi
  

  614.5%
  

  148.7%
  

Jupiter Merlin Income Portfolio

Jupiter Worldwide Portfolio

Jupiter Growth Portfolio

  21
  

  John Chatfieild-Roberts and Algy Smith-Maxwell
  

217.2%


361.9%


388.5%
 

114.8%


188.4%



163.9%

BlackRock GF World Mining

  21
  

  Evy Hambro
  

  668.4%
  

  260.4%
  

Lazard Emerging Markets

  21
  

  James Donald
  

  621.9%
  

  541.0%
  

Liontrust UK Smaller Companies

  21
  

  Anthony Cross
  

  954.6%
  

  555.3%
  

Morgan Stanley US Growth

  21
  

  Dennis Lynch & Sam Chainani
  

  395.9%
  

  198.8%
  

Threadneedle Property

  20
  

  Chris Morrogh
  

  351.6%
  

  151.1%
  

Premier Multi-Asset Distribution

  20
  

  David Hambidge
  

  163.2%
  

  114.8%
  

Marlborough Special Situations

  20
  

  Giles Hargreave
  

  2,470.3%
  

  555.3%
  

Source: AJ Bell. Data accurate to 08/03/19.
These are the 20 largest funds with fund managers that have been in situ for
at least 20 years.

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