“The decline in the number of funds in this edition of Spot the Dog is clearly positive news but only time will tell if this is a temporary blip or represents a more significant shift in the fortunes of active managers,” said Jason Hollands, managing director at Tilney Bestinvest.
“In fact most active fund managers investing in the UK market and Europe have now outperformed over three and five years – and that is based on their longest established share classes.
“Arguably the scope for outperformance should improve over time as the industry shift to lower cost share classes, stripped of commissions and platform fees, feeds through.”
However, despite overall positive trends, Hollands pointed out that the “huge” gulf between the best and worst performers.
“Amongst funds in the UK All Companies sector, £100 invested in the worst fund delivered a £9.20 return over three years while the best performer generated a £116.90 return – so it is still vital to be selective,” he remarked.
