In looking at how managers in the UK All Companies and UK Equity Income sectors fared versus the benchmark FTSE 100 every calendar year since 2001, FE data shows most struggled.
Several managers have beat the index the majority of the time over the past decade but only Dobell has topped its returns each and every period.
From 2001 to end of 2010 the FTSE has returned: -14.09%, -22.17%, 17.89%, 11.25%, 20.78%, 14.43%, 7.36%, -28.33%, 27.33% and 12.62%. So far in 2011 the return has been 2.46%.
Meanwhile M&G Recovery, which Dobell took over in 2000, has returned: -10.61%, -18.59%, 28.09%, 13.61%, 26.62%, 20.70%, 12.48%, -27.53%, 40.87%, 16.49%. So far in 2011 it remains on track in beating the index, up 2.78%. All figures are total return, bid to bid and run on FE Analytics.
While in the past US managers such Bill Miller or Peter Lynch have been talked of for their continual, year in and year out outperformance of the US benchmark, it is rarely discussed whether the UK has its own version.
Miller was said to have beat the S&P 500 every calendar year for 15, right up until 2005. In 1977 Lynch took up the helm of Fidelity’s Magellan fund and outperformed the S&P every year for 13.
The UK index has proved to be similarly difficult for managers to consistently top. There are the obvious difficult periods of 2001 and 2008 but many active managers did add value and beat the index over those two time frames.
In the UK Equity Income sector, 56 funds date back that far and only four underperformed the index’s -14.09% return in 2001. In 2008, 47 funds did better than the -28.33% fall in the FTSE 100.
Within the UK All Companies, 73 portfolios did better than the index in 2008 while 93 outperformed in the difficult 2001. Instead it was the positive years where funds typically lag. In 2007 the FTSE 100 gained 7.36%, according to FE Analytics. Just two Equity Income funds beat that return, Marlborough and Threadneedle Equity Income, while 40 out of 309 funds in the UK All Companies sector beat it.
