3 Best Performing UK Equity Funds

Looking for the best performing UK equity funds over the past three years? Or what about the most popular? We bring you the biggest and best in sector

Simon Dorricott 6 October, 2016 | 9:30AM
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This article is part of Morningstar's Guide to Passive Investing, helping investors make smart choices to meet their long-term investment goals.

3 Best Performing Funds Over Three Years

The funds on this list include some consistently strong performers.

Threadneedle (Lux) UK Equity is managed by Chris Kinder and holds a Morningstar Analyst Rating of Neutral. Kinder took over the fund in September 2014, after the previous manager left the team along with two analysts. Although this was Kinder’s first long-only UK fund he has a longer and successful track record running an extended alpha fund. Performance here has been similarly strong since he took over. His approach is bottom-up focused and the fund sits in the blend style box, showing only a very slight bias to growth at times.

Liontrust Special Situations, is Bronze rated by Morningstar. The approach combines two of Liontrusts’s experienced managers in Anthony Cross and Julian Frosh. Cross is a small- and mid-cap specialist and Fosh a large-cap specialist, with both adopting a similar investment approach that focuses on companies with significant intangible assets and good cash flow return on capital.

Jeremy Lang manages the Ardevora UK Equity fund which was launched in 2011. It uses a process that has been followed by Lang over his investment career and focuses on situations where biases in the behaviour of investors, financial analysts and company managers are likely. The fund is structured as a 150:50 long/short portfolio, can be reasonably concentrated in terms of number of positions and is benchmarked against the MSCI IMI Index.

3 Biggest Funds in the UK Equity Sector

Although these funds are relatively large, none is of sufficient size to cause concern.

JOHCM UK Growth is a truly all-cap product that is managed by Mark Costar. He has been at the helm since 2001 and has implemented a consistent value strategy over this time, which is based on finding undiscovered and undervalued companies. He takes a longer term approach and is happy to have a portfolio that is very different from mainstream indices at the sector and market-cap levels. Relative performance can therefore show significant divergence from the benchmark and peers. The fund holds a Morningstar Analyst Rating of Silver.

Nick Little manages the BGF United Kingdom fund and its sister UK domiciled fund BlackRock UK. He has managed this fund with variable results since taking over in October 2013, but has shown overall outperformance of the FTSE All-Share Index and the Morningstar Large-Cap Blend Equity category over his tenure. He adopts a pragmatic approach that combines industry views with stock selection, drawing on the UK team of managers/analysts, each of whom have sector research responsibilities. The fund holds a Morningstar Analyst Rating of Bronze.

Schroder ISF UK Equity is managed by Alex Breese and holds a Morningstar Analyst Rating of Neutral. It has only been managed by Breese since mid-2013, when he moved to Schroder from Neptune, where he successfully managed a UK fund. Breese joined the group at a time when the UK team was going through some change, but he has his own approach and has continued to follow that at this investment house. He focuses on stocks with value or underappreciated growth characteristics and, ideally, elements of quality. This gives him the flexibility to hold a variety of situations, but in aggregate there tends to be a slight value bias.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
BlackRock UK A Acc684.47 GBP0.37Rating
JOHCM UK Growth B GBP Inc3.89 GBP0.36Rating
Liontrust Special Situations R Inc500.17 GBP0.45Rating
Schroder ISF UK Equity A Acc GBP4.89 GBP-0.22Rating
Threadneedle (Lux) UK Eqs AG GBP Acc31.93 GBP-0.28Rating

About Author

Simon Dorricott  is a Senior Fund Analyst for Morningstar

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