Sterling corporate bond funds have dominated the small list of funds that have delivered consistently top quartile returns over the last three years, analysis by BMO Global Asset Management shows.
Only 14 funds can lay claim to the achievement of consistently ranking in the top quartile for each one year period over the last three years, representing 1.2 per cent of the 1,132-strong universe.
The IA Sterling Corporate Bond sector is most strongly represented, while the BNY Mellon Global Opportunistic fund in the Sterling Strategic Bond sector is the one other fixed income fund to feature in the list, taking the total representation of fixed income products to half.
No fund house features more than once on the list.
In equities, the Global sector produces the most consistent performers with the SLI Global Smaller Companies, T Rowe Global Focused Growth Equity and Lindsell Train Global Equity funds all delivering top returns.
The Marlborough UK Multi-Cap Growth and CFP SDL UK Buffettology General funds feature from the UK All Companies sector, while the Old Mutual UK Smaller Companies fund is the sole representative from the UK Smaller Companies sector.
The Loomis Sayles US Equity Leaders Fund is the only player from the IA North America sector.
The US market is notoriously difficult to outperform with previous research from BMO GAM showing the top performing fund over the last decade was the Powershares EQQQ Nasdaq-100 UCITS ETF, which more than doubled the return of the average active fund.
Kelly Prior, investment manager in the multi-manager team at BMO GAM, says very few managers claim that they can outperform in all market conditions with different economic cycles favouring different types of assets, stocks, sectors and styles.
“With the past 12 months being post the Brexit vote, consistency may well have been impacted by this factor too. Therefore, one could argue it has never been more important for investors to understand how managers are positioned in these unusual times.”
Lowering the hurdle, 130 funds delivered above median returns for each one year period over three years, with the IA UK Smaller Companies sector topping the list, with 19.6 per cent of funds qualifying on this measure.
The IA £ Strategic Bond and IA £ Corporate Bond sectors were the next best with 17.7 per cent and 17.5 per cent respectively.
Funds that have consistently delivered top quartile performance over three years
£ Corporate Bond
- Fidelity Inst UK Long Corporate Bond
- M&G Global Corporate Bond
- Henderson Institutional Long Dated Credit
- PIMCO GIS UK Long Term Corporate Bond
- Schroder Institutional Long Dated Corp Bond
- F&C Institutional Long Dated Corporate Bond
£ Strategic Bond
- BNY Mellon Global Opportunistic Bond
- SLI Global Smaller Companies
- T Rowe Global Focused Growth Equity
- Lindsell Train Global Equity
- Loomis Sayles US Equity Leaders Fund
UK All Companies
- Marlborough UK Multi-Cap Growth
- CFP SDL UK Buffettology General
UK Smaller Companies
- Old Mutual UK Smaller Companies Focus