Career outperformance
The first yardstick looks at managers’ performance over their career, which will normally cover several bull and bear markets, thus giving a good idea of how they perform in different conditions. Jason Hollands, of Tilney Bestinvest, says: “It measures the average monthly figure by which managers beat their benchmark.”

Topping the list was Giles Hargreave of Marlborough Special Situations, who achieved a monthly score of 0.88 percentage points. Behind him came a group of respected fund managers, headed by Stephen Harker of MAN GLG Japan Core Alpha; Hideo Shiozumi of Legg Mason IF Japan Equity; Gervais Williams of Miton UK Smaller Companies; and Martin Lau of First State Greater China Growth.

Recent performance
This looks at the same type of monthly outperformance, but over the past five years. The idea, says Mr Hollands, is to identify managers who have performed well over their career, without any sign of falling off in more recent times. “Some managers can start well, but their performance can deteriorate as the size of their funds grow, they take on other responsibilities, or they burn out and lose their hunger for success.”

Mr Shiozumi makes a second table-topping appearance, heading the list with a monthly outperformance of 1.08 percentage points. He is followed by Paul Mumford of Cavendish AIM fund; Keith Ashworth-Lord of Sanford DeLand UK Buffettology fund; Nick Train of Lindsell Train UK Equity fund; and David Cumming of Standard Life UK Equity Recovery fund. Mr Mumford, Mr Ashworth-Lord and Mr Cumming were also in the top ten career outperformers.

Consistency
This measure shows the percentage of months in which a manager beat his or her benchmark. The purpose is to distinguish between managers who have been consistently good throughout their career and those whose long-term record may have been artificially boosted by a one-off lucky streak. Taken with the other two, it sorts out the outstanding managers from the shooting stars and the also-rans. On this measure the top manager was Thomas Moore, of Standard Life UK Equity Income Unconstrained, who outperformed his benchmark 67 per cent of the time. He was followed by Dhananjay Phadnis of Fidelity Emerging Asia (who was also in the five-year top ten); Anthony Cross and Julian Fosh of Liontrust Special Situations (who also figured in the career and five-year top tens); Jeremy Lang and William Pattison of Ardevora UK Income; and Richard Colwell of Threadneedle UK Equity Income.

Longevity
A final ranking was given based on the length of time a manager had been operating in the particular sector he or she has specialised in. Mr Hollands says: “Consistently good performance is impressive, but even more so if it has taken place over a very long time. The top managers in this category have all been running funds in their sector for more than 20 years. In the final rankings this category was given a half-weighting, with a full weighting to the other three.”

The top managers have all been running funds in their sector for more than 20 years

At the top of the list was Nigel Thomas, the manager of AXA Framlington UK Select Opportunities, with 29 years’ experience in his sector, followed by Paul Mumford (28 years); Neil Woodford of CF Woodford Equity Income (27); Scott McGlashan of JO Hambro Japan (27); and Richard Pease of Crux European Special Situations (26).

Mr Hollands says: “The fund managers who ended up at the very top of the overall table are a mixture of well-known names, who are generally regarded as outstanding, such as Neil Woodford, Giles Hargreave and Nick Train, and some extremely good managers who have remained a bit under the radar. In some cases, such as that of Unicorn’s Chris Hutchinson, this is because they are based in a small boutique operation and are running a relatively small amount of money.

“Others, such as Martin Cholwill of the Royal London UK Equity Income Fund, and Mark Barnett of Invesco Perpetual, have been strong performers for a long time, but have been slightly overshadowed by the big beasts in their sector.

“Mr Barnett was for many years overshadowed by his former colleague Neil Woodford, although his figures are actually slightly better than Mr Woodford’s and the only reason that he is lower ranked is that he doesn’t have such a long track record.”

Tim Cockerill of Rowan Dartington, the wealth manager, says: “This study emphasises the point that it’s better to invest with a manager who has been through numerous economic cycles than one who hasn’t.”

The research is thorough and a useful guide for investors, says Patrick Connolly of Chase de Vere, the independent financial adviser, but he adds: “Past performance is not necessarily an indicator of which managers will be successful in the future, and other things should be considered, such as fund charges. It’s also worth noting that this study looks only at equities. Other investments can also form an important part of your portfolio.”

Justin Modray of Candidfinancial advice, the independent adviser, says the research makes a lot of sense, but it is important not to pick star managers in isolation, otherwise you could end up with an unbalanced portfolio.

He says: “It’s also important to remember that even star managers underperform at times. Even the managers at the top of Tilney Bestinvest’s table only beat their benchmark just over half the time, so there will be periods when even the star managers struggle. This is why it’s often sensible to combine good fund managers with low-cost index-tracking funds.”

A safe pair of hands: the top ten managers

1 Neil Woodford
CF Woodford Equity Income
Mr Hollands says: “Neil Woodford, left, is the closest thing the fund management industry has to a household name. Although he has struggled this past year, over his long career he has delivered strong, index-beating returns. He is prepared to avoid a sector completely if he doesn’t think it offers attractive prospects.”

2 Martin Cholwill
Royal London UK Equity Income
Mr Modray says: “While not as well known as some rivals, Mr Cholwill has built up an enviable track record over almost 20 years from investing in companies paying healthy dividends. His fund’s annual charge of 0.68 per cent is very competitive.”

3 Anthony Cross and Julian Fosh
Liontrust Special Situations
Mr Cockerill says: “They seek out companies with distinctive characteristics, such as intellectual property, which are hard for competitors to reproduce. This is combined with strong financial controls and quality management.”

4 Richard Pease
Crux European Special Situations
Mr Cockerill says: “Pease takes time to get to know the businesses he invests in and this accumulated knowledge is incredibly valuable.”

5 Chris Hutchinson
Unicorn Outstanding British Companies
Mr Connolly says: “Hutchinson has a strong track record. Although this fund is in the mainstream UK all-companies sector, he is primarily a smaller companies manager and has benefited from the outperformance of this sector over a number of years, though he tends to underperform in a falling market.”

6 Giles Hargreave
Marlborough Special Situations
Mr Modray says: “Hargreave has proved one of the most successful smaller company managers, with a great hands-on track record of picking profitable stocks. With its competitive annual charge, this fund is a good long-term hold.”

7 Mark Barnett
Invesco Perpetual High Income
Mr Hollands says: “Mr Barnett is very much cut from the same cloth as his former colleague Neil Woodford. He has a low turnover, long-term investment approach that targets high-quality companies with strong cashflow generation that offer good prospects of strong returns.”

8 Stuart Parks
Invesco Perpetual Asian
Mr Connolly says: “Parks is a reliable pair of hands in what can be a volatile region. He has concentrated on investing in good quality large-cap stocks and not taking big gambles. His low-risk strategy should allow investors to sleep at night.”

9 Daniel Nickols
Old Mutual UK Smaller Companies
Mr Connolly says: “Nickols benefits from the resources that Old Mutual has in this area and has built an impressive record by targeting companies with above-average earnings growth. Examples of his successful stockpicking include Fever Tree and Just Eat.”

10 Nick Train
CF Lindsell Train UK Equity
Mr Cockerill says: “Mr Train holds a small number of stocks [about 25] that he believes offer superior long-term returns, and then sits back and is patient. A classic example of tortoise rather than hare.”