Hot on the back of BestInvest’s ‘dog funds’ report, which contains the worst performing funds in the UK, the firm has now revealed what it believed to be the best funds available to investors.
The firm uses a star rating system and its team has over 400 meetings with managers each year. It also examines the records of each manager in their relevant sector and looks at career history, relative performance, cumulative performance and risk controls.
BestInvest also carries out statistical analysis to determine whether the performance is the result of skill rather than chance. A spokesperson for the firm said the analysis included asset allocation among other aspects of portfolio construction.
The firm determines how aligned the managers’ and clients’ interests are, or how much ‘skin in the game’ they have in the funds (their own money invested).
The top five funds rated that BestInvest released were:
- First State Asia Focus B GBP Acc A Large & mid-cap. A focused Asia Pacific ex-Japan equity growth fund.
- Liontrust Special Situations I Inc. A concentrated multi-cap UK equity portfolio targeting companies with a durable competitive advantage.
- Axa Global High Income Z Acc. A global high yield bond fund investing predominantly in US high yield bonds with some European exposure.
- Threadneedle European Select Z Acc. A concentrated portfolio of large cap continental European equities.
- Threadneedle UK Equity Income Z GBP Acc. The fund targets both capital growth and income from FTSE 100 and FTSE 250 stocks.
M&G Investments, a firm that had dominated BestInvest’s ‘dog funds’ for some time – making up 60% of assets held in the poorest performing funds – has two funds in the top 20, both Optimal Income funds.
Bestinvest is part of the global investment and financial planning company Tilney Group.
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