Over the past 25 years, I’ve written a weekly feature for Wealth on investment funds and trusts. Called Fund Focus, the objective is to give readers an insight into some of the funds they can use to bolster their investment portfolios.
Although I haven’t sat down and counted how many Fund Focuses I have compiled (that’s a task for retirement), I reckon it’s at least 1,000.
Of course, I cover some funds more than once. But all the Fund Focuses – this week’s is in the newspaper on page 58 – involve speaking to the manager at the helm, examining the investment record and digesting independent research published on the fund.
Sadly, not all the funds I examine go on to fulfil their potential – or live up to the spiel given to me by the manager. But many have provided handsome rewards to those who liked what they read and invested.
Yet Fund Focus is not a tipping column. Its objective has always been to give investors an insight into funds that might be on or off their radar. And I trust we achieve our mission.
A few weeks ago, I thought it might be a cathartic exercise to look back at the Fund Focuses I have written – and identify 20 funds which I think have shone the brightest. Not just in delivering satisfactory returns, but in terms of achieving results better than funds of a similar ilk.
Jeff Prestridge’s Fund Focus is not a tipping column, but gives investors an objective insight into funds that might be on or off their radar
The following 10 funds – a mix of investment funds and stock market-listed trusts – are my UK and European favourites. I will reveal the final 10 (rest of the world picks) next week. They are not recommendations, but funds which have shone for many years – and have the potential to do so for many more years yet.
If you have your own top fund list, and feel like sharing it, please send it to me at: jeff.prestridge@mailonsunday.co.uk. Wishing you a profitable investment journey.
1. ABERFORTH SMALLER COMPANIES
Edinburgh-based Aberforth Partners is a specialist investment house which focuses on running money invested in UK smaller companies – quoted, not unquoted, businesses.
It’s a lean, mean machine built around a tight, six-strong investment team. In total, it manages assets of £1.9billion, primarily spread across two investment trusts and an investment fund.
The flagship is the £1.1billion Aberforth Smaller Companies Trust, which later this year will be 35 years old. It is invested in 79 companies, with some familiar names in its portfolio – annuity provider Just Group and food manufacturer Bakkavor.
I looked at this trust nearly ten years ago when it was riding high – five-year investor returns of 120 per cent. But the subsequent investment journey has been trickier as a result of a subdued market in UK smaller companies. Since December 2015, returns generated have totalled 60 per cent.
Yet there are few other trusts or funds I would back to extract gains from this slice of the UK stock market (the bottom 10 per cent based on the market capitalisation of companies).
Recent returns, relative to rivals, are outstanding – 94 per cent over the past five years against a peer group average of 60 per cent. The investment managers also invest heavily in the funds they run: ‘skin in the game’ is always a good signal to investors that their money will be keenly managed. In addition, the trust has delivered 14 years of annual dividend growth.
Aberforth doesn’t court publicity, preferring instead to concentrate on looking after the financial interests of their investors. Frustrating for inquisitive journalists, but as the late Alan Steel (a super financial adviser) told me ten years ago when I had failed to get an interview with Aberforth: ‘I’m happy for them [Aberforth] to remain silent as long as their performance numbers impress.’
Aberforth Smaller Companies Trust is a great way to get exposure to UK smaller companies. The trust’s annual charges total 0.78 per cent.
The 10 funds – a mix of investment funds and stock market-listed trusts – are Jeff Prestridge’s UK and European favourites
2. ARTEMIS INCOME
There are few better UK equity income funds than Artemis Income. This £4.9billion fund is 25 years old next month and its success is largely down to the enduring ability of long-standing manager Adrian Frost – aided by Nick Shenton and Andy Marsh – to identify outstanding investment opportunities.
When I interviewed Marsh and Shenton in May 2021, the fund was in recovery mode after the economic lockdown of 2020 and dividend cuts applied by most of UK plc. Since then, it has generated steady returns for its investors, knocking spots off many of its rivals: returns of 37 per cent, compared with an average 24 per cent recorded by its peer…
Read More: I’ve examined more than 1,000 investment funds over 25 years to see which are