Performance of our favourite funds
Important information - The Wealth 50 isn't personal advice. You can always ask us for advice if you're not sure if an investment's right for you. The value of investments can fall as well as rise so you could get back less than you invest.
A track record of 15 years
We created the Wealth 150 in 2003 to showcase what we felt were the best funds in each of the main sectors. The Wealth 50 is a natural evolution. The same research process but now a more focused list.
We’re proud of the performance. Our favourite fund choices have, for the most part, beaten their sector averages and benchmarks. Not every fund has, and we don’t get every decision right.
Overall, we think it’s been a great success.
Performance by sector
Here's the performance of our favourite funds by sector against their most appropriate benchmark index and sector average.
|IA Sector||Average W150 Performance||Outperformance versus Benchmark index||Outperformance versus Sector average|
|UK Smaller Companies||122.0%||57.7%||45.2%|
|China/ Greater China||115.3%||44.0%||31.1%|
|Europe Excluding UK||89.7%||16.3%||21.3%|
|UK All Companies||68.3%||11.3%||20.9%|
|GBP Strategic Bond||46.7%||7.9%||14.1%|
|European Smaller Cos||44.6%||4.9%||8.7%|
|Global Emerging Mkts||79.4%||3.5%||14.3%|
|Asia Pacific Ex Japan||96.7%||3.2%||16.6%|
|UK Equity Income||55.4%||0.9%||7.0%|
|Mixed Investment 0-35% Shares||18.6%||0.8%||2.3%|
|GBP Corporate Bond||38.3%||0.8%||4.4%|
|North America Smaller Companies||66.3%||-4.9%||-6.4%|
|Mixed Investment 40-85% Shares||50.4%||-5.0%||13.7%|
|Mixed Investment 20-60%||22.4%||-5.5%||3.8%|
|GBP High Yield||31.3%||-5.8%||2.2%|
|Global Equity Income||30.2%||-6.4%||-8.4%|
|Technology & Telecoms||52.3%||-6.5%||-6.3%|
Past performance isn’t a guide to the future. Source: HL, 2018
How have these figures been calculated? The figures show the average performance of funds while they’ve been on the Wealth 150, broken down by sector. The average time a fund’s been on the list is just over 5 years. We compared each fund’s performance against their most appropriate benchmark index and sector average, then took an average for each sector and the Wealth 150 as a whole.
For example, we’ve calculated the average Wealth 150 fund in the UK All Companies sector has made 68.3% while it’s been on the list. It’s outperformed its benchmark and sector average by 11.3% and 20.9% respectively.
The two historical Wealth 150 selections made within the IA Property sector have been excluded from the comparison – we don’t think it’s possible to apply a fair benchmark in this sector.
What’s gone well?
We’ve found some exceptional UK fund managers over the years and we’ve backed them for a long time. Some have uncovered great growth opportunities, others have mastered the art of paying rising dividends.
Europe’s also been a rich hunting ground. It’s easy to be negative towards Europe given the economic problems it’s had. But the continent’s home to plenty of great companies and a small number of exceptional fund managers have helped us do well in this sector.
Asian and emerging markets are vast and exciting. There are plenty of opportunities, but also higher risks. Not many fund managers have been successful in this area, but we’ve found a few with long track records and excellent potential. This means that overall our fund selections have done well.
What hasn’t gone well?
Compared to Asia or emerging markets the US market is more efficient. Company, economic, and political announcements are pulled apart instantly and examined worldwide. It’s harder for fund managers to gain an edge and outperform.
We’re always on the lookout, but we think it’s best to invest in larger US companies through a low-cost tracker fund.
HL favourites that invest in the global sector have done well against peers, but on average have fallen short of global market index and tracker funds. The US accounts for well over half of the world market, so the relative performance of global funds is often determined by their US exposure – too little when the US is performing well can leave performance lagging behind. This has happened to lots of funds in the sector in recent years.
It’s a similar case with the mixed investment sectors too. They have outperformed their peer groups, but in Mixed 20-60% and Mixed 40-85% they’ve underperformed their assigned benchmark index. This is usually because the indices have a high proportion of government bonds, a market whose continued strength has wrong-footed active managers for years. As a result mixed-asset managers have shunned gilts, only to watch prices continue to rise.
Buying a Wealth 50 fund is just the start
As a Wealth 50 investor, we’ll keep you up-to-date with any new developments. For example, if we’ve just met the manager, negotiated an even better price on your fund, or your fund manager moves company, we’ll tell you.
The Wealth 50 isn't just a list of funds. It's your gateway to our research.