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Smooth operator Mumford doubles money in three years

Smooth operator Mumford doubles money in three years

Citywire AA-rated Paul Mumford, a veteran 'small-cap' investor whose stellar long-term track record has largely gone unheralded, is enjoying a strong run of form even by his high standards.

The manager's Cavendish AIM fund, housing just £80 million of assets, is one of just 24 funds to have delivered returns placing it in the top quarter of its sector in each of the last three years.

Fund group BMO regularly assesses which funds have attained that milestone through its quarterly FundWatch report. The latest count of two dozen, covering the three years to the end of March, is up from just six at the end of last year.

The Cavendish AIM fund is also a member of an even more select group of just five funds to have returned more than 100% over the last three years to the end of March. Mumford's 103% return is beaten only by two technology-focused funds, Neptune Global Technology and AXA Framlington Global Technology, and JPM's US Small Cap Growth fund. 

Mumford's strong run has seen the manager rise up Citywire's historic ratings table. Only one manager has racked up more months with a Citywire rating than him since our rankings were launched 15 years ago, Mumford's small-cap rival Giles Hargreave.

Mumford's 170 months with a rating places him eight behind Hargreave and level with Neil Woodford, whose performance difficulties have meant he hasn't enjoyed a rating since the summer of 2017.

The Investment Association's UK Smaller Companies sector in which Cavendish AIM sits housed the most funds with consistent top quartile returns for the third quarter in a row. Five of the sector's 48 funds have delivered returns placing them in the top quarter for each of the last three years.

They include Jupiter UK Smaller Companies, up 70.9% over three years. It remains to be seen whether the fund's winning streak can continue as AAA-rated manager James Zimmerman this month announced his resignation to move back to the US. He has run the fund since 2015 and will be replaced by Matt Cable from M&G, who has helped run a UK smaller companies pension fund for the past five years.

Other UK small cap funds making on to the list were Amati UK Smaller Companies, Hargreave's Marlborough Nano-Cap Growth and Octopus UK Micro Cap Growth.

The Sterling Corporate Bond and Global Emerging Markets sectors were next in line with above average numbers of consistent top performing funds, with seven out of 79 and three out of 58 respectively.

Among emerging markets funds, Baillie Gifford Emerging Markets Leading Companies and Baillie Gifford Emerging Markets Growth made the grade.

Baillie Gifford saw six of its funds drop out of BMO’s list at the end of last year, hurt by the sell-off in the last three months of 2018 which punished the growth stocks the fund group favours particularly hard.

The resurgence of the Edinburgh manager's emerging market funds shows the strength of the recovery since.

Kelly Prior, investment manager for BMO’s multi-manager team, said after a challenging end to 2018, funds ‘lurched back into positive territory’ at the beginning of the year.

‘However, something doesn’t quite add up, this quarter saw a significant drop in yields from government bonds; the US curve inverted in part and German bunds returned to negative territory, at the same time, equities surged,’ he said.

‘It will certainly be interesting to observe how this dynamic plays out throughout the rest of the year and into 2020.’

FundWatch's consistent top performers

Fund Three year return to 31/03/19
BMO Long Dated Sterling Corporate Bond 7.10%
Janus Henderson Inst Long Dated Credit 22.10%
Royal London Sterling Credit 18.60%
Schroder Sterling Corporate Bond 21.90%
Schroder Inst Long Dated Corporate Bond 29%
Pimco GIS UK Long Term Corp Bond Inst 23%
Fidelity Inst UK Long Corporate Bond 23.4%
Royal London Ethical Bond 18.30%
Baillie Gifford Strategic Bond 19.80%
Royal London Global Bond Opportunities 22.50%
JPM Asia Growth 76.80%
LF Miton European Opportunities 67.40%
Lazard MENA Inst 73.60%
Baillie Gifford Emerging Markets Growth 69.10%
Baillie Gifford Emerging Markets Leading Companies 75.40%
Quilter Investors US Equity Growth 41.60%
Investec American Franchise 78.60%
NFU Mutual UK Growth 38.40%
Liontrust Special Situations 39.40%
Jupiter UK Smaller Companies 70.90%
TB Amati UK Smaller Companies 56.20%
FP Octopus UK Micro Cap Growth 57.20%
TM Cavendish AIM 103.10%
Marlborough Nano-Cap Growth 54.40%

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Paul Mumford
Paul Mumford
1/13 in Equity - UK Medium Companies (Performance over 3 years) Average Total Return: 62.37%
Giles Hargreave
Giles Hargreave
19/55 in Equity - UK Smaller Companies (Performance over 3 years) Average Total Return: 47.7%
Neil Woodford
Neil Woodford
91/91 in Equity - UK Equity Income (Performance over 3 years) Average Total Return: -10.36%
Will Sutcliffe
Will Sutcliffe
1/254 in Equity - Global Emerging Markets (Performance over 3 years) Average Total Return: 86.07%
James Zimmerman
James Zimmerman