Counting experience: who are the longest-serving fund managers?

As Joe Biden becomes the oldest US president to take office, interactive investor looks at the performance of the longest-serving fund managers.

Today, Joe Biden will be sworn in as the oldest US President at inauguration in history – a title previously owned by Trump.

At a time when age – and deep pockets – appear to be something of a prerequisite for holding the highest US office, interactive investor looks at the performance of the longest serving fund managers in the fund and investment trust world (see table below).

At what point should investors be reassured by experience, or concerned from a succession planning perspective?

Fund managers that have racked up the longest track records are likely to have done so in large part because good performance has kept them there, with age arguably a red herring. As Mark Twain said, “age should merely indicate where the smiles have been.”

Nevertheless, it is interesting to see that eight out of ten of the longest serving open ended fund managers have outperformed their benchmark during their tenure (or as far back as comparable records will go), and nine out of ten of the longest serving investment trust fund managers have done likewise.

Longest serving managers

Longevity for active portfolio managers is a rare thing in an industry where performance is hyper-scrutinised and ‘styles’ can come in and out of fashion. Nor is past performance any guide to the future.

The longest-serving open-ended fund manager is Andy Brough who has managed the Schroder Institutional UK Smaller Companiesfor 33 years. The fund has grown 776% since benchmark comparisons allow from September 1999, outstripping the return of the benchmark FTSE Small Cap (excluding investment trusts) index over the same period (up 214%).

The second longest-serving fund manager is Sue Round, the manager of EdenTree Amity UK for the last 33 years. The fund has returned 1,145% since March 1998 when benchmark comparisons allow and whilst a big number, it is behind the benchmark index, the FTSE All Share, which generated 1,245% over the same period. Geoff Hitchin has also racked up 33 years on Super 60 rated Marlborough Global Bond and has returned 1,009% versus 596% benchmark performance since benchmark comparisons allow since February 1990.

When it comes to investment trusts, Peter Spiller is the longest-serving manager, with a 39-year tenure at the helm of Capital Gearing (LSE:CGT) (which was this month added to interactive investor’s Super 60 rated list). The trust has returned 2,848% versus 188% for the UK RPI since comparisons are available (from June 1987).

In second position in terms of tenure is Simon Knott, who has managed the Rights & Issues (LSE:RIII) investment trust for 37 years. Between 1 January 1986 to 31 December 2020 (as far as comparable data goes), the fund can be compared to the FTSE All Share, and has returned 24,068% versus 1,845% for the benchmark.

Dzmitry Lipski, Head of Fund Research, interactive investor, says: “At what point experience might become as much a cause for concern as celebration is an interesting question. Everyone has to retire eventually, after all – something loyal investors may well be mindful of.  But behind every good fund manager is a very capable investment team whose insight form the foundation of the manager’s convictions, underpinned by a stringent investment philosophy which isn’t moulded by the fund manager alone. And when it comes to investment trusts, Boards of Directors have shown real skill when it comes to succession planning.

“While a fund manager can be here one day and gone the next, the winning investment strategy won’t necessarily be impaired beyond recognition unless change is required to readdress perennial underperformance.”

Top 10 longest serving open-end fund managers and performance versus benchmark (where a fund does not have a benchmark, Morningstar will have allocated one)

Funds

*Performance data from earliest available data where benchmark and fund can be compared over same timeframe. Source: Morningstar/interactive investor to end December 2020 total return GBP. Past performance is no guide to the future. The value of your investments, and the income from them, can go down as well as up and you may not get back the full amount invested.

Investment trusts

*Performance data from earliest available data where benchmark and fund can be compared over same timeframe.

Performance data is Source: Morningstar, total return GBP to 31/12/2020. Past performance is no guide to the future. The value of your investments, and the income from them, can go down as well as up and you may not get back the full amount invested.

Fund manager tenure is source: AIC.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.