Fidelity International has emerged as the fund house with the greatest number of FE Alpha Managers following the latest rebalance of the list.
FE Alpha Managers represent the top 10 per cent of the UK retail-facing investment industry based on performance dating back to 2000, with extra weighting for managers with the longest track records.
Criteria taken into account include a manager’s ability to create risk-adjusted alpha, outperformance in both rising and falling markets, and those who consistently beat their benchmarks.
Overall there are 198 FE Alpha Managers with 10 coming from investment giant Fidelity, as the below chart shows.
Chinese equities specialist Raymond Ma and emerging markets specialist Nick Price were the latest additions from the group. However, Fidelity Global Financial Services manager Sotiris Boutsis dropped from the list in the latest rebalance.
Table of fund groups with 4+ FE Alpha Managers
Source: FE Analytics
Meanwhile Schroders, which was joint leader alongside Fidelity with nine managers at the last rebalance, saw value managers Nick Kirrage and Kevin Murphy and multi-asset specialist Johanna Kyrklund lose their FE Alpha Manager status.
Charles Younes (pictured), research manager at FE, said there was no single factor that goes into determining success at a group level.
He explained: “Fidelity’s Asia Pacific equities and emerging markets coverage gives them an edge over groups that don’t have managers in these areas whilst BlackRock’s strength here is largely down to their expertise in traditional asset classes.
“Meanwhile, three of Polar Capital’s six FE Alpha Managers take a thematic approach by working on specific sectors, proving that managers working this way can also add value.”
On a sector basis, one third of the IA UK Smaller Companies sector boasts FE Alpha Manager title, easily the biggest proportion of any sector.
The IA Asia Pacific including Japan (29 per cent) and IA European Smaller Companies (28 per cent) are the next-most successful sectors. Conversely, no IA UK Gilts or IA UK Index Linked Gilts managers made the grade.
Rob Gleeson, head of FE Research, said: “These markets have been suffering from either structural inefficiencies or uncertain political situations, which adds a lot of noise. This provides opportunity for careful analysis to add value.
“Bond markets have not offered much in the way of opportunity to outperform for a while as yields and spreads have remained tight, this is reflected with few bond managers making the grade for Alpha Manager status.”
Overall, 43 new FE Alpha Managers were announced including 32 that had not held the title previously, with Artisan, BNY Mellon, GAM, JP Morgan and Polar Capital all seeing two new managers added for the first time.
Ben Fitchew, who runs Ardevora Global Equity and Global Long Only Equity alongside current FE Alpha Managers Jeremy Lang and William Pattisson has joined his co-managers with the distinction for the first time.
The two funds have been top quartile performers in the IA Global sector since their respective launches in 2011 and 2013, returning 150.72 and 81.82 per cent.
Table of first time FE Alpha Managers part one
Source: FE Analytics
JPM Global Macro Opportunities co-manager Shrenick Shah is also among the new batch of FE Alpha Managers.
The fund is in the IA Targeted Absolute Return sector and has returned 27.86 per cent over the last three years with volatility of 7.74 per cent and a maximum drawdown of 9.78 per cent.
Turning to Japan, Janus Henderson Horizon Japanese Smaller Companies fund manager Yun Young Lee makes the cut having run the five FE Crown-rated fund since 2005.
One of the highest profile names on the new FE Alpha Manager list is industry veteran Michael Lindsell who has managed Lindsell Train Japanese Equity since 2004 and is a co-manager on the five FE Crown-rated Lindsell Train Global Equity alongside James Bullock and fellow FE Alpha Manager Nick Train.
Both high-conviction funds have been in the top quartile of their respective sectors over one, three and five years, with the older Japan fund also achieving the feat over 10 years.
Table of first time FE Alpha Managers part two
Source: FE Analytics
Closer to home, the only first-time UK manager to make the grade was David Walton, who co-manages the £160m Marlborough Nano Cap Growth fund alongside Guy Feld and fellow FE Alpha Manager Giles Hargreave.
He has managed the fund alongside the others since its launch in 2013, during which time it has made a total return of 64.45 per cent.
Elsewhere, Henderson’s Nick Price, M&G’s Claudia Calich and AXA Framlington’s Chris St John headline those that have regained their FE Alpha Manager status.
However, there were also 26 managers that had the title taken away from them, with value managers particularly suffering in this latest rebalance.
“Managers with a value bias have fared badly this time around – highlighted by managers who favour this style such as Kevin Murphy and Nick Kirrage of Schroders and Martin Walker of Invesco Perpetual dropping out,” FE’s Younes said.
“FE Alpha Manager ratings take a career view, suggesting that even over the long-term, value investing has not offered managers huge scope to outperform.”