It is 15 years since the FTSE 100 hit its all time high and while it has failed to return to that glory, the best UK fund managers have managed to more than quadruple their investors’ cash.
Despite the ups and down’s endured by the market and investors over the tumultuous period, UK funds managed by Schroders, Invesco Perpetual, GAM and Fidelity have managed to achieve significant gains.
On 30 December 1999, at the height of the dotcom boom, the UK’s benchmark index soared to 6,930. But a decade and a half later, it has yet to regain this level. It did, however, edge close on a number of occasions this year.
Since then a spate of volatility has troubled the market, particularly on the back of geopolitical concerns and the lower oil price.
But despite not returning to its former highs, as a result of dividends pay-outs, if an investor had put cash into the market in December 1999, they would still be enjoying a 70 per cent gain.
Looking back at the index’s trajectory, Hargreaves Lansdown senior analyst Laith Khalaf says: “It is easy to look at the level of the FTSE 100 and to conclude the market has gone nowhere for 15 years but even someone who invested £10,000 in the UK market at the worst possible time would now be sitting on £17,206 with dividends rolled up.
“That said, it has been a white knuckle ride at times, encompassing the tech crash, the global financial crisis and two bull markets.”
For investors who had backed the top active managers, the gains are considerable.
The top performing UK fund over the 15 year period is the £685m Schroder Recovery vehicle. Nick Kirrage and Kevin Murphy have run the fund since 2006 and £10,000 invested 15 years ago, at the top of the market, would now be worth a £45,798.
A close second is the £2.79bn Fidelity Special Situations fund, where the same lump sum would now be valued at £43,404. The portfolio was managed by City veteran Anthony Bolton from 1979 until the end of 2007, when Sanjeev Shah took over and has been in the hands of Alex Wright since the start of 2014, following Shah’s decision to step down.
Notably, the only top-performing fund to have enjoyed one continuous manager throughout this period is the £287m GAM UK Diversified fund. Over the 15 years, manager Andrew Green has turned £10,000 into £42,595.
Invesco Perpetual’s £12.3bn High Income and £6.5bn Income funds take fourth and fifth place respectively, with returns totalling £42,017 and £41,898 respectively.
Famously, both portfolios were run by Neil Woodford until March of this year, when they were taken over by Mark Barnett.
Khalaf says: “Clearly there has been a lot to gain from being invested with the right active managers over this period. Despite the investment period starting with a market nose-dive, these managers have still managed to quadruple investors’ money over the long term.”