Fund managers are like fine wines

When Tony Blair steps down as Prime Minister next month after a decade in Downing Street he will be the longest-serving Labour premier in history and one of the longest-serving of all time from any party.

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But if 10 years is a long time in politics it is no great span of years in the world of fund management. Next week Anthony Bolton, manager of the Fidelity Special Situations fund, will name the second of the two successors who will take over the running of the (recently split) fund he has managed since 1979.
If his example is anything to go by then it is certainly a good idea to back long-serving fund managers. Someone who had invested £1,000 in Fidelity Special Situations at launch and reinvested all dividends would have built up a nest-egg of £140,103 by the end of this March.
Darius McDermott, of Chelsea Financial Services, an independent financial adviser, says: “Mr Bolton is one of a number of long-established fund managers who have delivered impressive returns for investors. Others include Neil Woodford, manager of Invesco Perpetual’s Income and High Income funds, and Tony Nutt, who runs Jupiter’s Income and High Income funds.”
The same applies to managers of investment trusts. Clustered at the top of the list of longest-serving managers are many of the most successful operators in the industry. Hugh Young has been at the helm of Aberdeen New Dawn trust since 1989, during which time he has delivered excellent returns for his investors, as has the famous Dr Mark Mobius, who has been running Templeton Emeerging Markets trust for a similar length of time.
Not far behind them in the longevity stakes comes James Henderson, who took over the reins at Lowland investment trust in 1990 and has guided it to top place in the UK growth and income sector over the past 10 years.
Mr McDermott says: “Fund managers are like fine wine: they take time to mature. We like managers who have been at the helm of their fund long enough to have experienced both bull and bear markets. They are the ones who know what to do when times get tough.”