What have been the best performing investment funds since December 1999?

2nd March 2015

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The UK’s benchmark index the FTSE 100 may have only just recovered to its 1999 high but since the turn of the century, a number of funds have made some serious cash for their investors.

A cursory glance at the winning funds highlights that active managers have significantly outperformed the index, even if many have not.

Laith Khalaf, senior analyst, Hargreaves Lansdown said: “If investors can spend a little time picking out the winners, they stand a good chance of making themselves much wealthier.”

Research from Hargreaves Lansdown shows that the average UK fund has returned 90% since December 1999, this compares with a return of 68% from the FTSE 100, with dividends re-invested.

But the wider FTSE All Share, which most managers invest in, has also returned 90%, so the average active manager has performed exactly in line with the market.

Khalaf says: “On the face of it this may be perceived as a failure of active management but actually it is a reasonably positive result. It means the average active manager has given investors the same return as the index, after management fees and all transaction costs have been deducted.

“This would not have been possible from a tracker fund; a typical UK index tracker has returned 79% over the same period.”

Smaller companies and Emerging Market funds top the charts

The five top performing funds since 1999 are a mix of UK smaller companies funds and emerging markets funds.

 

Value of £10,000 invested

30th Dec 1999

Marlborough Special Situations £71,770
First State Asia Pacific £67,565
Aberforth UK Small Companies £59,409
Investec UK Smaller Companies £57,693
First State Global Emerging Markets £53,615

Source:  Lipper IM, total return Data to 24th Feb 2015

Best performing UK funds

The most appropriate funds for comparison with the FTSE 100 however are funds which sit in the UK All Companies and UK Equity Income sectors.

Value of £10,000 invested

30th Dec 1999

Schroder Recovery £50,877
Fidelity Special Situations £48,013
Invesco Perpetual High Income £46,699
Invesco Perpetual Income £46,533
GAM UK Diversified £46,136

Source:  Lipper IM, total return Data to 24th Feb 2015

Best performing sectors

The best sectors for investment since 1999 have generally been in the emerging markets.

Value of £10,000 invested 30th Dec 1999

IMA China/Greater China £40,148
IMA Global Emerging Markets Bond £32,780
IMA European Smaller Companies £30,105
IMA Asia Pacific Excluding Japan £28,831
IMA Global Emerging Markets £28,143

Source:  Lipper IM, total return Data to 24th Feb 2015

“Amongst the UK sectors index-linked gilts led the way, but this is hardly surprising seeing the period starts just before a big market fall. UK Smaller Companies were the best performing UK equity sector, followed by UK Equity Income, with the UK All Companies sector bringing up the rear,” added Khalaf.

Value of £10,000 invested 30th Dec 1999

IMA UK Index Linked Gilt £25,356
IMA UK Smaller Companies £25,275
IMA UK Equity Income £22,366
IMA £ Corporate Bond £19,897
IMA UK Gilt £19,535
IMA UK All Companies £18,991

Source:  Lipper IM, total return Data to 24th Feb 2015

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